NEUTRAL CITATION
C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO.7056 of 2023
With
R/SPECIAL CIVIL APPLICATION NO.8602 of 2023
With
R/SPECIAL CIVIL APPLICATION NO.7203 of 2023
FOR APPROVAL AND SIGNATURE :
HONOURABLE MR. JUSTICE NIRZAR S. DESAI Sd/-
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1 Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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SHIVJI JUMA MAHESHWARI
Versus
STATE OF GUJARAT
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Appearance :
MR SAVAN N PANDYA for the Petitioner.
MR ADITYASINH JADEJA, AGP for the Respondents.
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CORAM:HONOURABLE MR. JUSTICE NIRZAR S. DESAI
Date : 16/10/2023
COMMON ORAL JUDGMENT
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NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined
1. In view of the fact that very short identical issue is involved in all these petitions, with the consent of learned advocates for the respective parties, the matters are taken up for final hearing. Rule returnable forthwith. Learned AGP Mr. Adityasinh Jadeja waives service of rule on behalf of the respondents.
2. In Special Civil Application No.7056 of 2023, the petitioner has challenged the order dated 30.9.2022 passed by the Deputy Secretary (Appeals), Agriculture & Cooperation Department, Gandhinagar in Revision Application No.60 of 2021 whereby he confirmed the order dated 17.10.2020 passed by District Registrar, Kachchh by which liquidation of Abdasa Taluka S.C. - S.T. Majur Kamdar Sahakari Mandali Limited (hereinafter referred to as 'the Society') was ordered.
FACTS OF SCA NO.7056 OF 2023 2.1 The petitioner of Special Civil Application No.7056 of 2023 is the President of the Society which filled tender online to get the work order of the Panchayat Irrigation Division, Bhuj - Kachchh for repairing of storage tank and lake within six months. However, though the contract was given to the petitioner Society, the petitioner Society could not complete the work in time and, therefore, vide letter dated 6.3.2020, the respondent issued notice to the Society as to why its registration should not be cancelled and the Society should not be liquidated. The Society filed its reply to the aforesaid show-cause notice. However, on 11.9.2020, the respondent No.4 i.e. District Registrar, Kachchh passed an interim order dated 11.9.2020 under Section 107 and without assigning any reasons, passed an order of liquidation in respect of the Page 2 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined petitioner Society by exercising the powers under Section 108 (1).
2.2 In the aforesaid order, it was stated that against the interim order of liquidation, if the petitioner wants to make any representation, the same may be made within a period of one month to District Registrar, Bhuj - Kachchh failing which final order would be passed.
2.3 The petitioner did not make any representation and, therefore, the District Registrar, Bhuj - Kachchh passed an order dated 17.10.2020 stating that as there is no representation against the interim order dated 11.9.2020, the final order is passed under Section 107 (3).
2.4 The petitioner challenged the said order dated 17.10.2020 by filing Appeal No.58 of 2020 which came to be rejected vide order dated 1.7.2021.
2.5 Against the aforesaid order, the petitioner preferred Revision Application No.60 of 2021 under Section 155 of the Gujarat Cooperative Societies Act and as the aforesaid revision application also was rejected vide order dated 30.9.2022 by Deputy Secretary (Appeals), Agriculture, Family Welfare and Cooperation department, the present petition is preferred.
FACTS OF SCA No.7203 of 2023
3. The petitioner of SCA No.7203 of 2023 - Shri Dinodhhar Majur Kamdar Sahkari Mandali Limited - a co-operative Society though applied for online tender, could not complete the work and, therefore, pursuant to a show-cause notice, which was replied by Page 3 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined the petitioner, proceedings against the petitioner Society was started. Vide order dated 18.7.2020, interim order of liquidation was passed and though the petitioner has filed representation against the same, the District Registrar, Bhuj while passing the order on 11.9.2020 confirmed the interim order of liquidation by stating that the petitioner did not make any representation in time against the interim order of liquidation and, therefore, final order of liquidation was passed and Official Liquidator was appointed.
3.1 The petitioner challenged the aforesaid order by way of appeal under Section 109 by preferring appeal No.53 of 2020 which came to be rejected by order dated 1.7.2021 by Additional Registrar (Appeals), Co-operative Societies, Gujarat State and against the said order, the petitioner preferred Revision Application No.58 of 2021 which was also rejected vide order dated 30.9.2022. Hence the present petition.
FACTS OF SCA No.8602 of 2023
4. The petitioner of SCA No.8602 of 2023 - Kandala Godi Majur Kaamdar Sahkari Mandali Limited - a Cooperative Society who applied for online tender and though the tender was granted to it, pursuant to which the work was allotted to the Society, the Society could not complete the work allotted to it and hence, proceedings under Gujarat Cooperative Societies Act were initiated against the petitioner for liquidation.
4.1 Vide interim order dated 18.7.2020, District Registrar - Kachchh passed an interim order of liquidation. The petitioner Society was required to make a representation within a period of one month against the aforesaid order. Though the petitioner Page 4 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined made a representation against the aforesaid interim order dated 18.7.2020, the District Registrar, Kachchh passed an order dated 11.9.2020 confirming the interim order of liquidation on the ground that the petitioner has not made any representation.
4.2 The aforesaid order was challenged by way of Appeal No.54 of 2020 before the Additional Registrar (Appeals), Cooperative Societies, Gujarat State, Gandhinagar who rejected the appeal of the petitioner being Appeal No.54 of 2020 vide order dated 1.7.2021.
4.3 The aforesaid order was challenged by way of Revision Application No.59 of 2021 which also came to be rejected vide order dated 30.9.2022 and hence the present petition.
5. Learned advocate Mr. Jinesh Kapadia appearing for the petitioners in all these petitions relied upon the decision of this Court in the case of Majevadi Tel-Biya Uatpadak Sahakari Mandali Limited and others v. State of Gujarat through the Secretary and others, 2008 (2) GLH 35 and submitted that if any final order is passed under Section 107 (3) of the Act by the District Registrar without providing any opportunity of hearing to the Society on the basis of the fact that the Society has not made any representation against the interim order of liquidation, the same would amount to violation of principles of natural justice and such opportunity of hearing is required to be given. He further submitted that in two petitions i.e. SCA No.7203 and 8602 of 2023, the petitioner had made representations and those representations were not considered and while passing the final order, the authority held that as there was no representation by the petitioner Page 5 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined within time frame, the authority has confirmed the interim order of liquidation. He further submitted that be that as it may, the fact remains that the petitioners were not heard in each of the petitions once the interim order of liquidation was passed, but before passing the final order.
6. Learned Assistant Government Pleader Mr. Adityasinh Jadeja appearing for the respondents could not dispute either the aforesaid aspect or the settled legal proposition of law canvassed by learned advocate Mr. Kapadia. Though he opposed the petitions, he submitted to pass appropriate order.
7. I have heard learned advocates appearing for the respective parties and perused the record. On perusal of the record, I found that while passing the impugned order of liquidation, the District Registrar - Kachchh has specifically stated the petitioners to make representation within a period of one month failing which appropriate order would be passed. However, the fact remains that barring SCA No.7056 of 2023, in other two writ petitions, representation was made by the respective petitioners. Despite that, the District Registrar passed final order as if there was no representation made. In fact, in the impugned order also, it was recorded that no representation was received within the time prescribed and, therefore, only on that ground, since there was no representation, the interim order was confirmed by the District Registrar.
8. In view of the aforesaid background, the decision relied upon by learned advocate Mr. Kapadia in the case of Majevadi Tel- Biya Uatpadak Sahakari Mandali Limited and others v. State of Page 6 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined Gujarat through the Secretary and others (Supra) is required to be considered. While dealing with similar situation, the coordinate Bench of this Court in paragraphs 9 to 13 has observed in the said judgment as under :-
"9. The learned AGP appearing for the State Authority contended that if there is no explanation by the society or the society has not availed opportunity of submitting explanation, the District Registrar may not be required to give opportunity of hearing and therefore, order cannot be said as illegal in the eye of law.
10. In my view when sub-section (3) of Section 107 of the Act, independently provides for hearing and is not dependent upon the explanation by the society as conceived sub-section (2) of section 107 of the Act. It cannot be said that if the society has not submitted any explanation, no opportunity of hearing is required to be given before passing the final order for vacating or confirming interim order.
If such contention is accepted it would run counter to the scheme of subsections (2) and (3) of Section 107 of the Act. It is hardly required to be stated that liquidation is last resort and therefore, even if there is no explanation of the society submitted, it would be required for the District Registrar to consider the matter on the basis of the material available before him, and after giving opportunity of hearing to the society, the District Registrar has to record the Page 7 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined satisfaction for vacating or confirming interim order.
Therefore, such contention of learned AGP cannot be accepted.
11. Further it appears that in the impugned order passed by the District Registrar no satisfaction whatsoever is recorded for vacating or confirming order, except mentioning that after interim order no explanation or reply submitted on behalf of the society, and therefore, final order of liquidation.
Such can also be said as mechanical exercise of the power by the District Registrar without considering the ground / circumstances germen to the exercise of the power for finalising order of liquidation.
12. The aforesaid aspect which goes to the root of the matter are not considered by the Additional Registrar in appeal as well as by the State Government in Revisional Jurisdiction. Therefore, same also can be said as without proper application of mind.
13. In view of the above, the impugned order passed by the District Registrar for final order of liquidation of the petitioner society and its confirmation thereof by the Additional Registrar in appeal, and by the State Government in revision are quashed and set aside. As a consequence thereof the District Registrar will be required to give opportunity of hearing to the petitioner as required Page 8 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined under subsection (3) of section 107 of the Act, and shall be required to pass afresh order in accordance with law after giving opportunity of hearing to the petitioner society."
9. The aforesaid observations made by the coordinate Bench makes it clear that after the interim order of liquidation is passed by the District Registrar before passing final order, the petitioners were required to be heard. In the instant case, learned AGP Mr. Jadeja could not point out anything showing that the petitioners were heard and any opportunity of hearing was given to the petitioners. In view of that uncontroverted position, all these three petitions stand allowed. The impugned order dated 17.10.2020 passed by District Registrar, Kachchh (under challenge in SCA No.7056 of 2023) as well as impugned order dated 11.9.2020 passed by the District Registrar, Kachchh, (which were under challenge in SCA Nos.8602 and 7203 of 2023) are quashed and set aside. Consequential orders passed in Appeals as well as Revision Applications in each of the petitions are also quashed and set aside.
Each of the proceedings is remanded back to the District Registrar, Kachchh for adjudication from the stage of interim liquidation and the petitioners are directed to file representation if they so wish, within a period of one month from today. Once the period of one month is over, the District Registrar
- Kachchh is directed to give hearing to the petitioners and thereafter to pass appropriate final order in accordance with law.
10. It is clarified that this Court has not gone into the Page 9 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023 NEUTRAL CITATION C/SCA/7056/2023 JUDGMENT DATED: 16/10/2023 undefined merits of the matter and the present petitions are entertained only on the ground of non-observance of the principles of natural justice.
Rule is made absolute to the above extent. No order as to costs.
Sd/-
(NIRZAR S. DESAI,J) SAVARIYA Page 10 of 10 Downloaded on : Wed Oct 18 20:40:59 IST 2023