Shree Khadarpar Doodh Utpadak ... vs State Of Gujarat
2021 Latest Caselaw 15800 Guj

    C/SCA/12604/2021                             JUDGMENT DATED: 07/10/2021




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/SPECIAL CIVIL APPLICATION NO. 12604 of 2021


FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE BHARGAV D. KARIA

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1    Whether Reporters of Local Papers may be allowed                 NO
     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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     SHREE KHADARPAR DOODH UTPADAK SAHAKARI MANDALI LTD.
                            Versus
                      STATE OF GUJARAT
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Appearance:q
MR PK JANI, SENIOR ADVOCATE WITH VIRAL K SHAH(5210) for the
Petitioner(s) No. 1
MR ISHAN JOSHI, AGP for the Respondent-State
NOTICE SERVED BY DS(5) for the Respondent(s) No. 1,2,3,4
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    CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                             Date : 07/10/2021

                            ORAL JUDGMENT

1.Heard learned Senior Advocate Mr. P.K. Jani assisted by learned advocate Mr. Viral K. shah for the petitioner and learned Assistant Government Pleader Mr. Ishan Joshi for the respondent-State.

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2.Rule returnable forthwith. Learned AGP Mr. Ishan Joshi waives service of notice of rule for respondent-State.

3.By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs :

"(A) This Hon'ble Court be pleased to issue a writ of mandamus and/or writ of certiorari or any other appropriate writ, order or direction, quashing and setting aside the order dated 8.7.2001 passed by the District Registrar, Cooperative Societies, appointing one Mr. A.I. Shaikh as Investigating Officer (Annexure-D) as also the communication dated 20.7.2021 issued by the Cooperation Officer (Admn.).

(B) During the pendency hearing and final disposal of this petition, this Hon'ble Court be pleased to stay the implementation, execution and operation of the order dated 8.7.2001 passed by the District Registrar, Cooperative Societies, appointing one Mr. A.I. Shaikh as Investigating Officer (Annexure-D) as also the communication dated 20.7.2021 issued by the Cooperation Officer (Admn.).

(C) Any other and further relies as deemed just and proper looking to the facts of this case, may kindly be granted in favour of the petitioner, in the interest of justice."

4.Brief facts of the case are that the petitioner is a cooperative society registered under the Gujarat Cooperative Societies Act, 1961 (For short "the Act,

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1961) and its area of operation is Khadarpar village and the residents of Khadarpar village are the members of the petitioner society.

3.1) It is the case of the petitioner that in the area of operation of the petitioner-society, another society being proposed Khadarpar Mahila Doodh Utpadak Sahakari Mandli Ltd had made an application for registration of the said society which came to be dismissed on merits on 15th November,2019. It is the case of the petitioner that one Sumanba Ramdev Gohel who is not the member of the society had submitted complaint dated 8th June, 2021 and the respondent authorities have without issuing notice and without hearing the petitioner society, has appointed investigation officer and has directed the said officer to submit his report and opinion vide communication dated 8th July, 2021.

3.2) Pursuant to such communication dated 8th July, 2021, the respondent no.4 - Cooperation Officer (Admn.) has issued letter dated 20th July, 2021 directing the petitioner to submit the entire record of the society. Being aggrieved by such action of the

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respondent authorities, the petitioner- society has approached this Court by filing the present petition.

5.Learned Senior Advocate Mr. P.K.Jani assisted by learned advocate Mr. Viral K. Shah for the petitioner submitted that respondent no.3 - District Registrar of Cooperative Societies at Bhavnagar could not have passed the impugned order dated 8th July, 2021 to call for information from the petitioner-society on the basis of application made by a third party and therefore, letter dated 20th July, 2021 issued by the Cooperative Officer (Administration) is not tenable in law. It was submitted that the District Registrar ought not to have acted on the complaint made by the proposed society which is not a corporate body under section 37 of the Act, 1961 as held by this Court in case of Ramji Mandir Narsinhji & Ors. v. Narsinh Nagar alias Tekri Co. Op Housing Society Ltd & Ors. reported in 1979(1) GLR 801 and in case of Maneklal Mansukhbhai Co. Op. Housing Society Ltd. v. Rajendrakumar Maneklal Shah reported in 2002 (1) GLH 290.

4.1) It was submitted that the complaint made by such proposed society in the same

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area where the petitioner-society is being run was rejected by the District Registrar vide order dated 15th November, 2019 and subsequently, on the said complaint, the impugned orders are passed and therefore, such orders are required to be quashed and set aside. It was submitted that this is a clear case of mala fide in view of the fact that the District Registrar has acted at the behest of the proposed society and signatory of the complaint namely, Smt, Sumanba Ramdev Gohil who is not a member of the society.

4.2) Reliance was placed on the decision of this Court in case of Bhikhabhai Chanabhai Gajera v. Semrala Gopalak Vividh Karyakari Sahakari Mandali Limited, judgment dated 6th October, 2020 in Letters Patent Appeal No.460/2020 and allied matters wherein the issue of locus standi of a person is explained and decided. It was therefore, submitted that the District Registrar ought not to have acted at the behest of the proposed society whose proposal is turned down on its merits as well as its promoters thereof.

4.3) Learned Senior Advocate Mr.Jani further submitted that the impugned orders

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calling upon the information from the petitioner-society, are without any application of mind inasmuch as the District Registrar has appointed the investigation officer respondent no.4 to investigate the complaint dated 8th June, 2020 without following the procedure prescribed in the Act, 1961 and the Rules framed thereunder.

4.4) It was submitted that as per the provisions of the Act, 1961, the District Registrar has no power, authority or jurisdiction to hold inquiry or investigation which is not provided under the Scheme of the Act. It was submitted that the impugned orders are passed without issuing any notice and without giving any opportunity of hearing to the petitioner on the basis of the complaint made by the proposed society whose proposal for registration is already rejected.

4.5) It was also submitted that as per the Government Resolution dated 21st July, 2003, there can only be one society in the same village and in Khadarpar village, the petitioner society is in existence since 2006 and therefore, the proposed society could not have been registered as per the policy and

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resolution of the State Government. It was therefore, pointed out that the impugned orders are passed without jurisdiction and with mala fide intention with ulterior motive in violation of the principles of natural justice.

6.On the other hand, learned Assistant Government Pleader Mr. Ishan Joshi appearing for the respondent-State submitted that the impugned order dated 8th July, 2021 is not an order but is a communication whereby respondent no.4 is appointed as an investigation officer. It was submitted that the respondent no.3 has not initiated any inquiry but the impugned letter dated 8th July, 2021 is issued in the administrative capacity after taking into consideration the complaint dated 8th June, 2021.

5.1) Reliance was placed on section 88 of the Act, 1961 to justify the action of respondent no.3 and to contend that the District Registrar is conferred with the powers by the statute to inspect books of any State Cooperative Society and therefore, respondent no.4 is entrusted with such inspection of books by the impugned letter dated 8th July, 2021.

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5.2) It was submitted by learned Assistant Government Pleader Mr. Joshi that by the impugned letter respondent no.4 is only directed to conduct the inquiry/inspection and therefore, there is no question of violation of principles of natural justice at this stage because the petitioner cannot presuppose as to the eventuality of outcome of such inspection/inquiry by respondent no.4, hence, letter dated 8th July, 2021 is merely an administrative letter which cannot be said to be initiation of inquiry proceedings under section 86 of the Act, 1961.

7.Having heard the learned advocates for the respective parties and having gone through the material on record, it appears that respondent no.3 District Registrar, Bhavnagar has by impugned letter dated 8th July, 2021 directed respondent no.4 to submit a report with opinion with regard to the application dated 8th June, 2021 filed by one Smt. Sumanba Ramdev Gohel - Chief Promoter of proposed Khadarpar Mahila Doodh Utpadak Sahakari Mandli Ltd. Accordingly, respondent no.4 by letter dated 20th July, 2021 called upon the petitioner-society to produce records as mentioned in the complaint dated 8th June,

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2021 for inspection and inquiry.

8.Apart from the objections raised by the petitioner-society with regard to locus standi of the complainant who made an application on 8th June, 2021 before the District Registrar with regard to various allegations made against the petitioner, the impugned order/letter dated 8th July, 2021 and consequential letter dated 20th July, 2021 appears to be without jurisdiction in view of following provisions of the Act, 1961 :

"86. Inquiry by Registrar :

(1) The Registrar may of his own motion himself, or by a person duly authorised by him in writing in this behalf, hold an inquiry into the constitution, working and financial conditions of a society.

(2) The Registrar shall hold such an inquiry-

(a) on the requisition of a society duly authorised by rules made in this behalf to make such requisition, in respect of any of its members, such member being itself a society, or

(b) on the application of a majority of the committee of a society, or

(c) on the application of one-third of the members of a society...."

xxx

"88. Inspection of books by Registrar of

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financing bank or federal society.

(1)(a) The Registrar or the person authorised by him in this behalf shall have the right to inspect the books of any society and shall have free access to the books, accounts, documents, securities, cash and other properties belonging to, or in the custody of, the society.

(b) Every person who is or has at any time been an officer or employee of the society and every member and past member of the society shall furnish such information in regard to such transactions and working of the society as the Registrar or the person authorised by him may require.

(2) Where a society is indebted to any co- operative financing bank, such bank shall have the right to inspect the books of that society. The inspection may be made either, by an officer of the bank authorised by the committee of such bank or by a member of its paid staff certified by the Registrar as competent to undertake such inspection. The officer or member so inspecting shall at all reasonable times, have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the society and may also call for such information, statements and returns, as may be necessary, to ascertain the financial condition of the society and the safety of the sums lent to it by the bank.

(3) Where a society is a member of a federal society recognised by the State Government under section 95 such federal society shall have the right to inspect the books of that society. The inspection may be made either by an officer of the federal society authorised by the committee of such federal society or by a paid employee of such federal society certified by the

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Registrar as competent to undertake such inspection. Such officer or employee shall at all reasonable times have free access to the books, accounts, documents, securities, cash and other properties belonging to, or in the custody of the society and may also call for such information, statements and returns as may be necessary."

9.On perusal of the aforesaid provisions, it is clear that respondent no.3 could not have initiated the inquiry proceedings or inspect the books of the petitioner-society on the basis of complaint made by a third party.

10. On perusal of the impugned order/letter dated 8th July, 2021, it is clear that respondent no.4 is directed to make an inquiry and to furnish a report on the basis of such inquiry as per the complaint made on 8th June, 2021 by the complainant. Respondent no.3 could not have initiated such inquiry on the basis of the complaint of the person having no locus standi.

11. In view of above, reliance placed in case of Bhikhabhai Chanabhai Gajera (supra) by the petitioner is relevant, wherein Division Bench has held as under :

"32. In the instant case, the original

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writ applicant is a cooperative Society registered under the Act, 1961, whereas the appellant herein is the Chairman of a Agriculture Produce Market Committee constituted under the provisions of the Agriculture Produce Market Committee Act, 1963. The case on hand is not one in which the amendments carried out by the writ applicant-Society in its bye- laws has caused an adverse effect upon any other Cooperative Society registered under the Act, 1961. We fail to understand how the Chairman of a Agriculture Produce Market Committee could have raised objections with regard to the amendments in the bye- laws of a Cooperative Society registered under the Act, 1961. For the sake of arguments, we may assume for the moment that an Agriculture Produce Market Committee has some say with regard to the bye-laws of any cooperative society registered under the Act, 1961, the question would be to what extent the Chairman of such APMC, on his own, could have raised this issue and preferred appeals under Section 153 of the Act, 1961. The Committee of the APMC, as a whole, is not before us. The Chairman of the Committee is before us and there is nothing on record to indicate that this action is at the instance of the statutory Committee of the APMC, duly constituted under the provisions of the APMC Act through its Chairman. There is nothing on record to indicate that the committee passed a resolution empowering its Chairman to prefer appeals and raise this issue. There are no pleadings in this regard in the memo of the appeals.

33. In the aforesaid context, we may refer to a Constitution Bench judgment of the Supreme Court in Daman Singh vs. State of Punjab, 1985 2 SCC 670,

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wherein it is said;

"......Once a person becomes a member of a cooperative society he loses his individuality qua the society and he has no independent rights except those given to him by the statute and the bye-laws He must act and speak through the society or rather , the society alone can act and speak for qua rights or duties of the society as a body.....".

34. The same principle, as afore-quoted will apply in the present case also so far as the appellant is concerned being a Chairman of a Agriculture Produce Market Committee.

35. A Division Bench of this Court in the case of Manubhai Hathibhai Patel v. Sejalben Janakbhai Patel [2010) (2) GLH looked into the meaning of the expression 'any person aggrieved' so as to consider whether the original complainant could be said to be 'a person aggrieved'. Therein the Court observed,

"14. ... ... ... None of the legal rights of the petitioners are violated or breached. The term "person aggrieved" must be understood in the context in which the provisions of the statute under consideration have been made. Section 57 of the Act, as already noted, empowers removal or disqualification of an elected member, Up Sarpanch or Sarpanch. ... ... ... The role of the complainant in such a case is to bring to the notice of the Competent Authority the alleged irregularities. It is thereafter a matter between the elected

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members, Upa-Sarpanch or Sarpanch as the case may be and the Competent Authority. As a complainant, a person who brings such irregularities to the notice of the Competent Authority may participate in the proceedings and bring on record material at his command. He, however, cannot claim to be a "person aggrieved" if ultimately on the basis of the evidence on record, the proceedings are dropped by the Competent Authority ... ... "

36. In Jashbhai Motibhai Desai v. Roshan Kumar, Haji Bashir Ahmed [(1976) 1 SCC 671] the Supreme Court elaborately discussed the concept of 'an aggrieved person', and observed that in order to have the locus standi to invoke certiorari jurisdiction, the petitioner should be an aggrieved person. If he does not fulfill that characteristic, and if is a 'stranger', the Court will deny him this extra ordinary remedy.

37. It was stated,

"... ... ... of the cases in which a strict construction was put on the expression "person aggrieved", is Buxton and ors. v. Minister of Housing and Local Government [(1961) 1 QB 278]. There, an appeal by a Company against the refusal of the Local Planning Authority of permission to develop land owned by the Company by digging chalk, was allowed by the Minister. Owners of adjacent property applied to the High Court under Section 31(1) of the Town and Country Planning Act, 1959 to quash the decision of the Minister on the ground that the proposed

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operations by the company would injure their land, and that they were 'persons aggrieved' by the action of the Minister. It was held that the expression 'person aggrieved' in a statute meant a person who had suffered a legal grievance; anyone given the right under Section 37 of the Act of 1959 to have his representation considered by the Minister was a person aggrieved, thus section 31 applied, if those rights were infringed; but the applicants had no right under the statute, and no legal rights had been infringed and therefore they were not entitled to challenge the Minister's decision." (Para 30)

38. The Apex Court further stated what Salmon J. quoted with approval these observations of James T. J. in In Re Sidebothem [(1880) 14 Ch D 458, 465], and the passage quoted with approval would apply apt and apposite.

"The words 'person aggrieved' do not really means a man who is disappointed of a benefit which he might have received if some other order had been made. A 'person aggrieved' must be a man who has suffered a legal grievance,'a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrong fully refused him something, or wrongfully affected his title to something." (Para 30) (emphasis supplied)

39. The following observations of the Apex Court in Ravi Yashvant Bhoir v. District Collector, Raigad [(2012) 4 SCC 407] explains the concept and the law.

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"... ... ... A legal right is an averment of entitlement arising out of law. In fact, it is a benefit conferred upon a person by the rule of law. Thus, a person who suffers from legal injury can only challenge the act or omission. There may be some harm or loss that may not be wrongful in the eyes of law because it may not result in injury to a legal right or legally protected interest of the complainant but juridically harm of this description is called damnum sine injuria." (Para 58) "The complainant has to establish that he has been deprived of or denied of a legal right and he has sustained injury to any legally protected interest. In case he has no legal peg for a justiciable claim to hang on, he cannot be heard as a party in a lis. A fanciful or sentimental grievance may not be sufficient to confer a locus standi to sue upon the individual. There must be injuria or a legal grievance which can be appreciated and not a stat pro ratione valuntas reasons i.e. a claim devoid of reasons." (Para

59)

40. The Supreme Court in the Bar Council of Maharashtra vs. M.V. Dabholkar (1975) 2 SCC 702, opined that the meaning of the words 'person aggrieved' will have to be ascertained with reference to the purpose and the provisions of the statute. It observed that the words 'person aggrieved' correspond to the requirements of locus standi which arises in relation to the judicial remedies.

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41. Thus, in order to become entitle to seek a statutory remedy, a person must show and establish that he is injured with a legal wrong. There must be an injury to a legally recognised, legally protected and legally enforceable right. The principle to be applied is that there must be a injuria sine damnum and not the damnum sine injuria for taking a legal action and a legal recourse. A damage suffered has to be coupled with legal injury. It is this kind of injury on which the right- enforceability may be based.

42. For acquiring a standing to sue or a standing to take a legal recourse or right to initiate legal action for relief, the presupposition is that there must subsist a legal wrong, one or invaded right in existence in relation to the subject matter in respect of which the action is sought to be initiated and the relief is asked for. It is this element which makes a person the possessor of litigative interest to become an aggrieved person. Again the invasion of right sought to be remedied should not be of one infringed in abstract. Its invasion must be in the context of the subject matter and the provision for which the right to seek relief or what is called locus standi, is claimed.

43. Whether a person is aggrieved person, whether he has suffered a legal injury and whether he has thus the locus to seek remedy in law are the aspects, to be determined keeping in view the subject matter, the kind and nature of, and controversy, the legal provision with reference to which they arise. The context of the provision and the subject matter, are the important aspects.

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44. The appellant herein had no legal right of his own which could be said to have been infringed so as to entitle him to invoke Section 153 of the Act to seek remedy therein. It is only in the matters involving public interest dimensions, which is not the case here, that the rule of person aggrieved or the principles of locus standi is made elastic. As there is no right to be enforced with the appellant in respect of the subject matter, as he is not 'aggrieved person' and is devoid of locus in law, the writ of mandamus would not lie in respect of the prayer.

45. On this short point of locus standi alone, as discussed above, all the writ applications deserve to be allowed."

12. Thus in facts of the case, the proposed cooperative society had no locus standi to file the complaint against the petitioner society and respondent no.3 could not have directed respondent no.4 to submit an inquiry report on the basis of such complaint under any provisions of the Act, 1961.

13. In view of the foregoing reasons, the petition succeeds and is accordingly allowed. Rule is made absolute to the aforesaid extent.

(BHARGAV D. KARIA, J) RAGHUNATH R NAIR