Gir-Somnath Jilla Sahakari Doodh ... vs State Of Gujarat
2022 Latest Caselaw 7276 Guj

     C/SCA/11881/2022                                  JUDGMENT DATED: 23/08/2022




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
                   R/SPECIAL CIVIL APPLICATION NO. 11881 of 2022

FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
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1     Whether Reporters of Local Papers may be allowed to see
      the judgment ?

2     To be referred to the Reporter or not ?

3     Whether their Lordships wish to see the fair copy of the
      judgment ?

4     Whether this case involves a substantial question of law
      as to the interpretation of the Constitution of India or any
      order made thereunder ?

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           GIR-SOMNATH JILLA SAHAKARI DOODH UTPADAK SANGH LTD.
                                    Versus
                             STATE OF GUJARAT
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Appearance:
MR PRAKASH JANI, learned Senior Advocate Assisted by Mr.VIRAL K SHAH(5210) for
the Petitioner(s) No. 1
MS NIDHI VYAS, AGP for the Respondent(s) No. 1,2
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    CORAM:HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
                               Date : 23/08/2022
                              ORAL JUDGMENT

1. Heard Mr.Prakash Jani, learned Senior Advocate assisted by Mr.Viral Shah, learned advocate for the petitioner and Ms.Nidhi Vyas, learned AGP for the respondents-State.

2. Rule returnable forthwith. Ms.Nidhi Vyas, learned AGP waives service of notice of Rule for the respondents-State.

3. By the present writ petition, the petitioner has prayed for the following prayers:

"(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

C/SCA/11881/2022 JUDGMENT DATED: 23/08/2022

direction, quashing and setting aside the impugned communication/order dated 18.05.2022 passed by the respondent No.3 herein and further be pleased to direct the respondent to carry out the audit of the petitioner society under the provision of the Act of 1961, forthwith.

(B) During the pedency hearing and final disposal of this petition, this Hon'ble Court be pleased to direct the respondents to carry out the audit of the petitioner society under the provisions of the act of 1961, forthwith.

(C) Any other and further relief as deemed just and proper looking to the facts of this cas4e, may kingly be granted in favour of the petitioner, in the interest of justice."

4. It is submitted by Mr.Prakash Jani, learned Senior Advocate that the district of Junagadh was bifurcated and Gir Somnath was notified as a separate district by the State Government vide notification dated 13.08.2013. Accordingly, upon the constitution of new district of Gir Somnath, five societies has applied for registration as Federal Milk Producing Society under Section 9 of the Gujarat Co-operative Societies Act, 1961 (for short "the Act").

5. It is further submitted that vide order dated 19.06.2014, the petitioner society was granted registration and the said registration granted to the petitioner society came to be challenged by one, Badalpara Dudh Utpadak Sahakari Mandali under Section 153 of the Act. In the appeal proceedings, the Additional Registrar (Appeals) was pleased to cancel the registration of the petitioner-society by order dated 18.11.2019. Thereafter, by order dated 24.06.2020, the Revisional Authority upheld the order dated 18.11.2019 passed by the Additional Registrar cancelling the registration of the petitioner-society. Thereafter, Special Civil Application No.8226 of 2020 was

C/SCA/11881/2022 JUDGMENT DATED: 23/08/2022

preferred by the petitioner-society. By order dated 21.09.2020, the orders of the Additional Registrar (Appeals) dated 18.11.2019 and order dated 24.06.2020 of the Deputy Secretary (Appeals) were quashed and set aside and the registration of the petitioner-society came to be restored.

6. It is further submitted that till date no audit has been held in terms of Section 84 of the Act, which is a mandatory provision. It is further submitted that since the business of the society is running in crores of rupees annually, it is necessary that the respondents conduct the annual audit of the society's accounts in terms of Section 84 of the Act, so that the funds of the society are properly managed to the benefits of its members.

7. Per contra, Ms.Nidhi Vyas, learned AGP submits that when the registration of the petitioner society is cancelled by the order dated 18.11.2019, another society being Kanhaiya Gir Somnath Jila Sahakari Dudh Utpadak Sangh Limited came to be registered on 26.11.2019. She further submits that though as on date the petitioner-society may be considered as registered society in wake of the order dated 22.09.2020, the said order of the learned Single Judge has been impugned before the Hon'ble Division Bench in Letters Patent Appeal No.834 of 2022. By order dated 24.01.2022, the said Letters Patent Appeal has been admitted by this Court. However, the learned AGP admits that there is no stay granted to the order of the learned Single Judge upholding registration granted to the petitioner society by the District Registrar of Co-operative Societies.

8. Ms.Vyas, learned AGP submits that since the registration

C/SCA/11881/2022 JUDGMENT DATED: 23/08/2022

issue of both the societies is under adjudication and merely because the petitioner-society's registration has been revived, it cannot claim any right over the other society by seeking an audit. She further submits that the authorities have not conducted any audit of both the societies in view of the pendency of the litigation with respect to their registration. She further submits that by conducting an audit, it may create a right in favour of the petitioner society, which may have a substantial effect on the Letters Patent Appeal pending between the parties, as it would amount to recognizing the registration of the present petitioner-society. She submits that the audit of accounts have not been conducted only due to the pendency of the Letters Patent Appeal.

9. In the present case, the facts reveal that the petitioner society has more than 118 primary co-operative societies as its members and the business is running in crores of rupees. The primary objective of Section 84 of the Act is to keep a check on the accounts of the registered co-operative societies keeping in mind the interest of its members, so that funds of the society are properly managed as per norms.

10. In the present case the pendency of litigation cannot be an excuse for not conducting an audit in terms of Section 84 of the Act, which can be detrimental to the interest of the members of the petitioner-society. Further in absence of any stay of the order granting registration to the petitioner society, the petitioner society stands registered in terms of the provisions of Gujarat Co-operative Societies Act. Therefore, also the Registrar of Co- operative Societies cannot shun its duty under Section 84 of the

C/SCA/11881/2022 JUDGMENT DATED: 23/08/2022

Act under the garb of pendency of litigation. Once a society is registered with the Registrar, Co-operative Societies, it becomes mandatory to do an audit under Section 84 of the Act.

11. In view of the above observations, present writ petition stands allowed and the order dated 18.05.2022 passed by the respondent No.3 is set aside. The respondents are directed to conduct the audit of the petitioner society in terms of Section 84 of the Act in accordance with law. Rule is made absolute to the aforesaid extent.

Direct service is permitted.

(ANIRUDDHA P. MAYEE, J.) ALI