Gujarat High Court
The Momaipura Mahila Dudh Utpadak ... vs Additional Registrar (Appeals) on 30 September, 2022
Bench: Bhargav D. Karia
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 16443 of 2020
With
R/SPECIAL CIVIL APPLICATION NO. 9907 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 9908 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 9909 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 9910 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15706 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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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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THE MOMAIPURA MAHILA DUDH UTPADAK SAHAKARI MANDLI LIMITED
Versus
ADDITIONAL REGISTRAR (APPEALS)
==========================================================
Appearance:
MR DIPEN DESAI(2481) for the Petitioner(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 1,3,4,5
MR PRAKASH JANI, SENIOR ADVOCATE WITH MR SHIVANG P
MR VC VAGHELA for the Respondents
MR DHAWAN JAYSWAL, AGP for the Respondent-State.
==========================================================
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 30/09/2022
CAV JUDGMENT
1. Heard learned advocate Mr. Dipen Desai for
the petitioner, learned Senior Advocate Mr.
Prakash Jani assisted by learned advocate
Mr.Shivang P.Jani and learned advocate Mr.
V.C. Vaghela for the respondents and learned
Assistant Government Pleader Mr. Dhawan
Jayswal for the respondent-State.
2. Rule returnable forthwith. Learned advocate
Mr. Shivang P. Jani, learned advocate Mr.
V.C. Vaghela and learned Assistant Government
Pleader Mr. Dhawan Jayswal waives service of
notice of rule on behalf of the respondents.
3. These petitions are filed challenging the
orders passed by the Additional Registrar
under section 153 of the Gujarat Cooperative
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
Societies Act, 1961 (For short "the Act,
1961") cancelling the registration of the
petitioner societies granted by the District
Registrar under section 4 of the Act, 1961.
4. As the issues involved in all the captioned
petitions are the same and challenge is also
to the similar order passed by respondent
no.1-Additional Registrar, these petitions
were heard analogously and having regard to
the peculiar facts and circumstances of the
case, the pivotal issue involved in these
petitions and with the consent of the learned
advocates appearing for the parties, these
petitions are being disposed of by this
common judgment and order.
5. The challenge to the impugned orders in the
respective petitions are as under :
(1) In Special Civil Application No.16443 of
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
2020, Order dated 10.12.2020 passed by
respondent no.1-Additional Registrar
(Appeals) in Appeal no.53 of 2019 and
consequential order dated 11.12.2020 of the
respondent No.5-Election Officer excluding
the name of the petitioner society in the
voters list was challenged.
(2) In Special Civil Application No.9907 of
2021, Order dated 23.06.2021 passed by the
respondent no.2-Additional Registrar
(Appeals) in Appeal No.23 of 2021 was
challenged.
(3) In Special Civil Application No.9908 of
2021, Order dated 23.06.2021 passed by the
respondent no.2-Additional Registrar
(Appeals) in Appeal No.24 of 2021 was
challenged.
(4) In Special Civil Application No. 9909 of
2021, Order dated 23.06.2021 passed by the
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
respondent no.2-Additional Registrar
(Appeals) in Appeal No.25 of 2021 was
challenged.
(5) In Special Civil Application No.9910 of
2021, Order dated 23.06.2021 passed by the
respondent no.2-Additional Registrar
(Appeals) in Appeal No.22 of 2021 was
challenged.
(6) In Special Civil Application
No.15706/2020, prayer is made to hold
inaction of respondent no.2 and 3 in not
taking any action on the representations of
the petitioner as illegal and further to
direct respondent no.4 to restart the
collection of milk of the petitioner society.
6. For the sake of convenience, Special Civil
Application No.16443/2020 is treated as the
lead matter. The facts giving rise to this
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
litigation may be summarised as under :
6.1) The petitioner society applied
online for the registration of its society
under the provisions of the Act, 1961 before
respondent no.3- District Registrar.
6.2) Pursuant to the application of the
registration of the petitioner society,
respondent no.2 - The Vadhasar Dudh Utpadak
Sahakari Mandli Limited filed its objections
opposing the registration of the petitioner
society.
6.3) Respondent no.3-District Registrar
by letter dated 15.03.2019 called upon the
petitioner society to file reply to such
objections and statement of the petitioner
was also recorded and considering the
statements of the petitioner, respondent no.3
- District Registrar rejected the objection
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
of respondent no.2 society considering that
the petitioner society has complied with the
provisions of the Act, 1961 and the Rules as
to the registration and its bye-laws are not
contrary to the Act and the Rules and
thereafter passed the order dated 29.03.2019
to grant the registration under section 9 of
the Act, 1961.
6.4) Respondent no.2 society feeling
aggrieved by the order dated 29.03.2019
preferred appeal under section 153 of the
Act, 1961 before respondent no.1-Additional
Registrar. The petitioner also filed reply
opposing the appeal. However, respondent no.1
by order dated 24.07.2019 granted stay
against the registration of the petitioner
society. The petitioner therefore, approached
the Deputy Secretary (Appeals), Agriculture
and Cooperation Department, State of Gujarat,
by preferring Revision Application No.42/2019
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
which could not be listed for hearing due to
corona pandemic after March 2020.
6.5) The petitioner thereafter filed
Special Civil Application No.8842/2020
challenging the order dated 24.07.2019 passed
by respondent no.1 - Additional Registrar
which was partly allowed by order dated
6.08.2020 by this Court suspending the stay
order till the hearing of the appeal by
respondent no.1.
6.6) Meanwhile, respondent no.5 Election
Commission notified the elections of the
respondent no.4- Mehsana District Co-
operative Milk Producers' Union Limited by
publishing notice dated 1.12.2020. Respondent
no.4 - Union stopped taking supply of the
milk from the petitioner from 3.11.2020. The
petitioner therefore, filed Special Civil
Application No.15706/2020 before this Court
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
which is also heard along with this group of
petitions.
6.7) Respondent no.2 raised the
objections before the Election Officer on
4.12.2020 against the inclusion of the
petitioner society in the voters' list on the
ground that registration of the petitioner
society was stayed by the Additional
Registrar. The petitioner filed reply along
with order passed by this Court on 6.08.2020
suspending the order of stay.
6.8) Thereafter respondent no.1
Additional Registrar heard the appeal filed
by respondent no.2 and by impugned order
dated 10.12.2020 cancelled the registration
of the petitioner society.
6.9) The petitioner society has
therefore, challenged the order dated
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10.12.2020 passed by the Additional Registrar
cancelling the registration of the petitioner
society in Special Civil Application
No.16443/2020. Similar orders of cancellation
of registration are passed in Special Civil
Application No.9907/2021 to 9910/2021.
7. Learned advocate Mr. Dipen Desai for the
petitioner-societies submitted that the main
issue that arises in all these petitions is
whether appeal under Section 153 of the Act,
1961 is maintainable at the behest of the
existing societies challenging registration
granted to a new society and even if it is
maintainable, to what extent and on what
ground such appeal can be filed and
entertained.
7.1) It was submitted that Article 19(1)
(c) of the Constitution of India, provides
that all citizens have the right to form a
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
co-operative society and Article 19(4)
provides for powers of the State Legislature
to impose reasonable restrictions in the
interest of sovereignty and integrity of
India or public order or morality in exercise
of such rights conferred under Article 19(1)
(c) of the Constitution of India. It was
submitted that every citizen has a
fundamental right to form a co-operative
society, subject to reasonable restrictions
to be imposed by the State as provided in
Article 19(4). It was therefore, submitted
that the appeal filed by respondent no.2
before the Additional Registrar was not
maintainable.
7.2) Learned advocate for the petitioners
submitted that registration of a cooperative
is governed by section 4 of the Act, 1961
which provides that the society which has as
its object for the promotion of the economic
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
interests or general welfare of its members
or of the public in accordance with the
cooperative principles or as society
established with the object of facilitating
the operations of any such society, may be
stipulates that society shall not be
registered if, in the opinion of the
Registrar, it is economically unsound, or its
registration may have an adverse effect upon
any other society, or it is opposed to, or
its working is likely to be in contravention
of public policy. It was therefore, submitted
that the Registrar may refuse registration
only on three grounds namely, (i) it is
economically unsound, or (ii) Registration
may have adverse effect upon any other
society, or (iii) it is opposed to or its
working is likely to be in contravention of
the public policy.
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
7.3) It was submitted that the
petitioner-societies made an application
before the District Registrar as provided
under section 8 of the Act,1961 read with
Rule 3 of the Cooperative Societies Rules,
1965 (For short "the Rules, 1965") and
registration was granted as per the procedure
prescribed under section 9 of the Act, 1961.
It was pointed out that the petitioners-
societies complied with the provisions of the
Act and the Rules and accordingly after
considering the objections filed by
respondent no.2, District Registrar has
granted registration to the petitioners-
societies.
7.4) Reliance was placed on section 9(6)
of the Act, 1961 which provides that if the
Registrar refuses to register the society, he
shall forthwith communicate its decision with
reasons thereof to the person who has signed
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first on the application so as to submit that
only in case of refusal, District Registrar
has to give reasons for refusal otherwise the
Certificate of Registration is to be issued
to the society under section 9(4) which is a
conclusive evidence as per section 9(5) of
the Act,1961. It was therefore, submitted
that respondent no.2 could not have
challenged the registration granted to the
petitioners-societies by preferring an appeal
under section 153 of the Act, 1961.
7.5) It was submitted that on conjoint
reading of sections 4, 8 and 9 of the Act,
1961 and Rule 3 of the Rules, 1965, it only
provides for inviting objections from the
existing societies by the Registrar with a
view to satisfy that the registration of the
new society does not have adverse effect on
the existing societies. It was therefore,
submitted that the existing societies have no
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
right to be heard by the Registrar or to
prefer an appeal against the order of
registration of the new society.
7.6) It was submitted that Section 153 of
the Act provides for an appeal against an
order passed under Sections 4 and 9, however,
according to the petitioner-societies, no
appeal could be preferred by the existing
society as no right of hearing by the
District Registrar at the time of considering
the application for registration is required
to be given nor District Registrar is
required to communicate the order of
registration to the existing society giving
right to the existing societies to file
appeal.
7.7) Reliance was placed on the decision
in case of Rameshbhai Maganbhai Lakhani v/s.
State of Gujarat reported in 2011 (4) GLR
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2877, wherein this Court has held that the
process of registration of a new society
cannot be in any manner termed to be a
judicial or a quasi-judicial function so as
to envisage an adversarial approach from the
existing societies. It was submitted in view
of the decision of this Court wherein it is
held that even the existing society did not
have any statutory right to lodge formal or
substantial objection against consideration
of proposal of new society, based upon the
safeguards provided under Section 4 of the
Act, 1961, more particularly, when a group
of like-minded citizens come together and
form a co-operative society, then such
society has to be registered except it is
found that one of the three exceptions
provided in proviso to Section 4 of the Act,
1961 are attracted.
7.8) Reliance was also placed on the
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decision of Bombay High Court in case of
Sonewadi Vividh Karyakari Seva Sahakari
Society Ltd. Vs. State of Maharashtra and
Others reported in 2002 SCC Online Bom 1295,
wherein it is held as under:
"11. The provisions relating to the
registration of the societies are
contained in Chapter II of the Act.
Section 3 of the Act provides that the
State Government may appoint the
Registrar and appoint one or more
persons to assist the Registrar.
Accordingly the State Government has
appointed the Registrar, and also
appointed Joint Registrars, District
Deputy Registrars and Assistant
Registrars to assist the Registrar. The
power of granting registration to the
Cooperative Societies has been delegated
to the District Deputy Registrar.
Section 4 of the Act lays down as to
which Societies can be registered.
According to Section 4, the Society,
which has as its objects promotion of
the economic interests or general
welfare of its members, or of the
public, in accordance with the co-
operative principles, may be registered
as a society. Proviso to Section 4 lays
down that the society, which is likely
to be economically unsound, or the
registration of which may have an
adverse effect on development of the
cooperative movement, or the
registration of which may be contrary to
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
the policy directives which the State
Government may, from time to time,
issue, shall not be registered. Section
6 of the Act lays down the conditions
for registration of the societies such
as, society must have atleast 10 or such
higher number as the Registrar may
consider necessary having regard to the
economic viability and development of
co-operative movement, as members.
Section 7 confers a power on the State
Government to exempt any society or
class of societies from any of the
requirements as to the registration.
Section 8 lays down that application for
registration shall be made in the
prescribed proforma and shall be
accompanied by four copies of the by-
laws and such registration fee, as may
be prescribed; the application is
required to be signed atleast by 10
proposed members. Under Section 9 the
Registrar, if satisfied that the society
has complied with all the provisions of
the Act and the Rules, to grant
registration to the society within two
months from the date of the receipt of
the application. The Act or the Rules
nowhere provide for granting of hearing
to the existing society before
registering a new society.
12. The only ground as canvassed by Shri
Raghuvanshi for granting of hearing to
the existing society is that the
business of the existing society may be
adversely affected by the competition
from the second society. Competition is
a necessary part of life. Under the
Companies Act, it is not necessary to
grant hearing to existing Company even
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
if a new Company is proposed to be
incorporated for carrying on the same
business and even if such registration
is likely to adversely affect the
business of the existing Company. The
Partnership Act does not confer any
power on the Registrar of Firms to
refuse the registration of the
partnership on the ground that the
second partnership would compete with
any firm already in existence.
Competition is not recognised as a
ground for refusing registration of any
other association or organisation under
any other law. The competition would
ultimately benefit the consumers. The
registration cannot, therefore, be
refused on the ground of competition
unless there is a clear statutory
provision to that effect, and if at all
any statute makes such provision,
constitutional validity thereof would
have to be tested on the touchstone of
Articles 14 and 19 of the Constitution
of India. The registration of the
society is, therefore, a rule and
refusal to grant registration is an
exception.
13. Registration of a proposed society
can be refused only on the grounds laid
down in proviso to Section 4 of the Act.
The grounds on which the registration of
a society can be refused are, (i) the
proposed society is likely to be
economically unsound, (ii) the
registration of which may have an
adverse effect on development of the co-
operative movement, (iii) the
registration of which would be contrary
to the policy directives, which the
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State Government may, from time to time,
issue. The first ground that the Society
is likely to be economically unsound
applies qua the proposed society and not
qua the existing societies. The fact
that by granting registration to the
second society, the first society would
become economically unsound is not a
ground for refusal of registration to
the second society. The power given to
the State Government to issue policy
directives must be exercised in
consonance with the Act and not de hors
the Act. The requirement as to the
minimum turnover of Rs. 50 lacs
prescribed by the State Government may
be for the purpose of ensuring
economical soundness of the second
society and also for the purpose of
ensuring that unviable Societies do not
mushroom because the liquidation of one
or more unviable Co-operative Societies
may adversely affect the co-operative
movement. But to restrict the number
only to two societies, even where three
or more societies can be financially
viable, cannot be said to be for
preventing an adverse effect on the
development of the co-operative
movement. Some villages may be so
prosperous or resourceful and
enterprising that there could be enough
room for multiple societies having a
turnover of more than Rs. Fifty lacs. To
say that there should be only two
societies in a village and there should
not be third society, may stultify
growth of co-operative movement and
cannot be said to be a policy directive
in consonance with the Act. The
discretion conferred on the Registering
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Authority (Registrar or the Deputy
Registrar, as the case may be), cannot
therefore, be taken away under the guise
that more than two multi-purpose
societies should never be permitted in
the same village. The existing society
must be heard before registration of new
society cannot be the general rule
applicable in every case. Take for
instance the big city like Mumbai or
Pune (which may consist of only one or
few revenue Villages). If a Co-operative
Housing Society is registered by 10
members coming together in such city and
other 10 or more persons desire to form
another Co-operative Housing Society and
propose to acquire land and construct a
building adjoining to the existing
society, can it be said that the first
society should be heard before
registration of the second society? If
the principle that the first society
should be heard is carried to its
logical conclusion, then all existing
housing societies in the city would have
to be heard before registering a new
housing society. This would result into
absurdity."
7.9) Learned Advocate Mr. Desai
therefore, submitted that the existing
societies have no right to even lodge formal
objections or file appeal against the
registration of a new society. Hence, the
appeal preferred by the existing societies
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itself was not maintainable and on that
ground only, the appellate order being
without jurisdiction and without authority of
law, is required to be quashed and set aside.
7.10) It was further submitted that the
right of appeal is not an absolute right or
an inherent and it is only a statutory right
and for appeal being maintainable, it must
have clear authority of law. In support of
such submission, reliance was placed upon the
decision of the Hon'ble Supreme Court in the
case of Vijayprakash D. Mehta v/s. Collector
of Customs, reported in 1988 (4) SCC 402,
and the decision of Apex Court in the case of
Shayam Kishor V/s. Municipal Commissioner of
Delhi, reported in 1993 (1) SCC 2. It was
therefore, submitted that the existing
societies do not have any right of appeal
under Section 153 of the Act, 1961.
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7.11) In the alternative and without
prejudice to the main contention of appeal
not being maintainable under section 153 of
the Act, 1961, it was submitted that assuming
for a while that the existing societies have
right of appeal then also, such right would
only be limited to the proviso to Section 4
of the Act, 1961 for the purpose of showing
any adverse effect upon the existing
societies, if the registration is granted to
the new society. In support of his
submission, reliance was placed on the
decision in case of Endala Milk Producers'
Sahakari Mandali Limited v/s. State of
Gujarat, reported in 2016 (1) GLR 13, wherein
it is held as under:
"10. Now so far as the provision under
Section 4 of the Act is concerned, it
obliges the Registrar to grant
registration to "any" society which is
formed with the object of promotion of
economic interests or general welfare of
its members or with the object of
facilitating the operations of any
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society.
10.1 It is pertinent that Article 19(1)
(c) of the Constitution of India
guarantees right to form an association.
In light of Article 19(1)(c) of the
Constitution, objection against
registration of a co-operative society
which complies all requirements and
fulfills all conditions prescribed by
the Act would not be maintainable and
cannot be entertained.
10.2 However, the proviso of Section 4
confers power to the authority,
considering that reasonable restriction
on right to form association can be
prescribed by law, to decline
registration in favour of a society in
case where he is satisfied that
registration of a society is not opposed
to and may adversely affect operation of
other society or where it is in
contravention of public policy or it is
economically unsound.
10.3 The said provision ensures
elimination of unhealthy competition and
to protect objects and principles of
cooperation principally in social
sector.
10.4 For such avowed purpose and object,
said special authority is conferred to
the Registrar.
10.5 So as to oppose registration of
respondent No.4 society, the petitioner
placed reliance on said proviso of
section 4 of the Act.
10.6 Thus only if it is established that
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(a) the society seeking registration is
economically unsound and / or (b) its
registration may adversely affect
operation of any other society and / or
(c) its registration militates against
public policy, the registration can be
declined. 10.7 Therefore question arises
whether in present case any one - or
more than one - aspects out of various
factors contemplated under said
provision is established against the
respondent No.4 society."
7.12) Relying upon the above decision, it
was submitted that any appeal challenging
order of registration of an existing society
can only be entertained on the point of
adverse effect and on no other ground
whatsoever.
7.13) It was further submitted that any
party filing appeal will have to show whether
any of their legal or statutory right is
violated or whether they are aggrieved party
or not. In support of such submission,
reliance was placed on the decision of
Division Bench of this Court in case of
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Bhikhabhai Chanabhai Gajara v/s. Shemrala
Gopalak Vividh Karyakari Sahakari Mandali
Limited, rendered in Letters Patent Appeal
No.460 of 2020 in Special Civil Application
No.9848 of 2020 dated 06.10.2020, wherein the
Division Bench while considering the scope of
appeal under Section 153 of the Act, 1961
against an order of registration of a
society, has observed as under :
"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
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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
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."
It was submitted that the Division
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Bench of this Court has categorically held
that right under Section 153 of the Act, 1961
against an order of registration can only be
availed by an aggrieved person who has
suffered a legal injury.
7.14) It was therefore, submitted that the
societies who have challenged the order of
registration of the petitioners-societies in
Special Civil Application Nos. 9907 to 2021
to 9910 of 2021 also have no locus whatsoever
to prefer an appeal, as such societies cannot
be considered to be aggrieved party as none
of their legal rights was violated by
registration of the petitioners-societies as
they have failed to show any adverse effect
on such existing societies due to
registration of the petitioners-societies.
7.15) It was submitted that the appeal
preferred by such existing society was not
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maintainable as there was neither locus
standi nor proviso to section 4 with regard
to adverse effect was fulfilled. It was
therefore, submitted that all the petitions
are required to be allowed only on the ground
that the appeal under section 153 of the Act,
1961 was not maintainable.
7.16) It was further submitted that the
remedy of appeal provided under Section 153
of the Act, 1961 is not a remedy akin to
public interest litigation where any stranger
can challenge the registration of the
petitioners-societies on any ground
whatsoever.
7.17) Learned advocate Mr. Desai submitted
that the Additional Registrar while allowing
the appeals filed by the existing societies
has committed an error in not following the
guidelines stipulated in the judgment of this
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Court in Special Civil Application No.15560
of 2003 and allied matters inasmuch as in
Special Civil Application No.16443/2020, the
District Registrar has followed the
guidelines issued by this Court by giving an
opportunity to the existing societies to
submit objection and after considering the
same, registration was granted to the
petitioners-societies whereas in cases of
other four societies, no objections were ever
submitted at the time of registration as such
societies have no connection with the
petitioners-societies as they are situated at
far off place with no adverse effect at all
for registration being granted to the
petitioners-societies.
7.18) It was therefore, submitted that the
reasoning of the Additional Registrar that
the directions issued in the judgment
rendered in Special Civil Application
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No.15560 of 2003 have not been followed, is
contrary to the facts on the record and
therefore, such findings amounts to perverse
findings and accordingly, the impugned orders
are required to be quashed and set aside.
7.19) It was reiterated that in none of
the cases, there is an adverse effect either
pleaded or shown by the existing societies
coupled with the fact that District Registrar
after considering the objections and
conducting inquiry has granted registration
by passing a speaking order on 29.03.2019
wherein the evidence produced by the existing
societies as well as the petitioners-
societies with regard to the milk collection
of the existing societies and that of the
proposed societies, profit of the existing
societies vis-a-vis the new societies, number
of members etc. was considered in detail and
after considering such aspects, the District
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Registrar has granted registration to the
petitioner of SCA No. 16443/2020 on
conclusion that the registration of the
petitioners-societies will not have any
adverse effect on the existing societies.
7.20) It was submitted by learned advocate
Mr. Desai that even before the appellate
authority, the existing societies have not
shown any facts which would even remotely
suggest an adverse effect due to registration
of the petitioners-societies and there is no
whisper as to how the registration of the
petitioners-societies would have adverse
effect on the existing societies.
7.21) It was therefore, submitted that in
absence of any proof or even evidence that
the registration of the petitioners-societies
would have adverse effect on the existing
societies, the Additional Registrar ought not
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to have interfered with the order of granting
registration.
7.22) It was further submitted that there
is no law that there cannot be more than one
society in a village and on the contrary if
such view is taken then the same would be in
violation of Article 19(1)(c) of the
Constitution of India.
7.23) Learned advocate Mr.Desai also
referred to and relied upon the circular
dated 08.03.2019 whereby the circular dated
05.05.2015 relied upon by the Additional
Registrar has been cancelled. It was
therefore, submitted that the circular
08.03.2019 permits registration of more than
one society in one village and therefore, the
contention of the existing societies that
there cannot be more than one society in one
village is completely misconceived and
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baseless.
7.24) It was further submitted that in
absence of any evidence to show the adverse
effect on the existing societies, the
impugned orders passed by the Additional
Registrar are required to be quashed and set
aside, more particularly when in Special
Civil Application No.16443 of 2020, the milk
collection and profit of the existing
societies has increased manifold and
therefore, the contention that the
registration of the petitioners-societies
would have adverse effect on the existing
societies is misconceived and misplaced.
7.25) Reference was also made to the order
dated 29.03.2019 passed by the District
Registrar granting registration to the
petitioners-societies in Special Civil
Application No.16443/2020 to show that said
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order includes the condition that there
should not be any adverse effect on the
existing societies.
7.26) It was further submitted that the
petitioner of Special Civil Application
No.16443 of 2020 is a Womens' Co-operative
Society registered for the benefit,
upliftment and empowerment of the women of
the village and none of the members of the
petitioners-societies and the existing
societies are common and therefore, the
registration of the petitioners-societies
ought not to have been cancelled by the
appellate authority.
7.27) Learned advocate Mr. Desai submitted
that the appellate authority has set aside
the order of registration of the petitioner-
society on flimsy ground that the husband of
one of the promoters of the petitioners-
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societies was Director in the existing
society and since the husband has fallen out
from the existing society, he has formed a
new society which according to the Additional
Registrar was material for considering the
application for registration. It was
therefore, submitted that such reasoning
given by the appellate authority has no
relevance whatsoever in view of the
provisions of Sections 4, 8 and 9 of the
Act, 1961 and the Rules,1965 which have been
duly considered by the District Registrar
while granting the registration to the
petitioners-societies.
7.28) It was submitted that in all the
petitions, the challenge to the registration
of the petitioners-societies was made or
impugned order was passed at the time of
ongoing election. For example, in Special
Civil Application No.16443 of 2020, election
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process of Mehsana District Co-operative Milk
Producers' Union Limited was going on and
because of cancellation of registration of
the petitioners-societies, their names were
removed from the final voters' list by the
Election Officer on the very next day whereas
in cases of other petitioners-societies of
Special Civil Application Nos.9907 of 2021 to
Special Civil Application No. 9910/2021, the
election of APMC, Balasinor was in progress
and the registration of the petitioners-
societies was cancelled so as to see that the
petitioners cannot participate in the
election. It was therefore, submitted the
challenge to registration was not a bonafide
challenge but with oblique purpose to ensure
that the petitioners-societies would not be
able participate in the election. It was
therefore, submitted that the impugned orders
were passed by the Additional Registrar with
oblique motive to ensure that the
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petitioners-societies do no participate in
the elections resulting into colourable
exercise of powers.
7.29) It was therefore, submitted that the
impugned orders of Additional Registrar
cancelling the registration of the
petitioners-societies are not sustainable and
deserves to be quashed and set aside.
8. On the other hand, learned Senior Advocate
Mr. Prakash Jani with learned advocate
Mr.Shivang Jani for the respondent no.2-
existing society in Special Civil Application
No.16443/2020 submitted that the petitions
are not maintainable in view of alternative
efficacious remedy available under section
155 of the Act, 1961 to prefer revision
application against the order passed under
section 153 of the Act, 1961.
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provides for filing an appeal against the
order passed under section 4 of the Act, 1961
and accordingly, respondent no.2 has
preferred an appeal before the Additional
Registrar (Appeals) and therefore, there is
no error of law in the order passed by the
appellate authority by giving cogent reasons
to cancel the registration of the
petitioners-societies.
8.2) It was submitted that granting
registration to the petitioners-societies is
contrary to the principles laid down by this
Court in case of Vachhol Dudh Utpadak
Sahakari Mandali Limited Versus State of
Gujarat rendered in Special Civil Application
No. 15560 of 2003 decided on 7.10.2006,
wherein it is held that the District
Registrar is required to give an opportunity
to the existing cooperative society to file
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objections against the registration of the
proposed society.
8.3) Learned Senior Advocate Mr. Jani
submitted that the petitioner could not have
filed these petitions because in eyes of law
once registration is cancelled, there is no
existence of petitioner as a cooperative
society and there is no stay granted by any
Court against order passed by Additional
Registrar.
8.4) It was submitted that respondent
no.2-society in Special Civil Application No.
16443/2020 was registered on 24.03.1975. It
was submitted that since 1975, respondent
no.2-society is carrying on the activities of
collecting milk from its members and
supplying the same to respondent no.4-Union.
It was pointed out that respondent no.2
society has its own office building, godown,
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milk testing facilities, and cooler to
preserve milk and bulk cooler costing more
than Rs. 11 Lakh. It was submitted that
functioning of respondent no.2 society has
been adversely affected due to the
registration granted to the petitioners-
societies because earlier five persons were
employed and thereafter services of two
persons are put to an end because of less
work as the quantity of milk received is less
because of the petitioners-societies.
8.5) It was submitted that village
Vaghashar where the petitioner-society and
the respondent no.2 society are situated has
persons are the members of respondent no. 2
Vaghashar Dudh Utpadak Sahakari Mandli
Limited.
8.6) It was submitted that prior to
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registration, the petitioners started
supplying milk under different names and the
persons behind petitioner-society were
working under the banner of "Dudharampura
Milk Producers Co-operative Society" and
established collecting centers in village
Vaghasar in the name of another co-operative
society. It was pointed out that with the
registration of petitioner-society, the
working of the respondent no.2 society was
seriously affected and the procurement of
milk was reduced in the year 2018-2019 than
that of year 2017-2018 from 558337 liters to
383846 liters. It was therefore, submitted
that since the petitioner-society has started
collection of milk by opening collection
centre, work of respondent no.2 society is
affected.
8.7) Learned Senior Advocate Mr. Jani
also referred to the details of supply of
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milk in terms of money as per the report of
the Government Auditor to show that supply of
milk to respondent no.4 Union was reduced in
the year 2018-2019 than that of year 2017-
2018 from Rs.2,06,54,518/- to Rs.
1,09,01,605/-.
8.8) It was submitted that respondent
no.2 society is ready and willing to admit
all the members of the petitioner-society in
order to see that the members of the
petitioner-societ do not suffer or they are
not put to any hardship in any manner.
8.9) It was submitted that the District
Registrar has ignored the facts and evidence
available on record to grant registration to
the petitioner-society contrary to the
proviso to section 4 of the Act, 1961 and
contrary to the Government Resolutions which
stipulate that in the same village
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registration of another cooperative society
with the same object is to be rejected.
8.10) Reliance was placed on Government
Resolutions dated 08.09.1989, 21.07.2003,
07.11.2006, 13.08.2007 and 05.05.2015. It was
submitted that the District Registrar has
granted the registration to the petitioners-
societies in total disregard to such
resolutions.
8.11) It was submitted that the
petitioner-society has seriously affected the
total receipt of milk to the extent of one
Lakh liter per year and as a result thereof
the profits of the respondent no. 2 society
is also affected and respondent no.2 society
could not give increase in rate to it members
compared to the previous years inasmuch as 3%
increase in rate of milk was given in last
year as against 7% in the preceding two years
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because the petitioner-society was collecting
milk from the persons who were earlier
members of respondent no.2 society. It was
submitted that earlier there were 180 members
of the respondent no.2 society which is now
reduced to 126 members only.
8.12) It was submitted that if the
registration of the petitioners-societies is
restored, the same would have adverse effect
on the respondent no. 2 society which is in
existence since last more than 45 years.
8.13) It was submitted that in small
village like Vaghashar,it is not feasible to
have two cooperative societies with same
objects. It was submitted that the petitioner
society came to be registered only because
earlier, the husband of the chairperson of
petitioner society through the representation
of the respondent no. 2 society had become
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member of the Managing Committee but later
on, he was disqualified. It was submitted
that the chairperson of the petitioner
society is primary teacher serving at another
place residing at Patan and is not having any
residence in the village Vaghashar. It was
submitted that even those persons who are
from other villages are made the members of
the petitioner-society to increase the
membership numbers.
8.14) It was therefore, submitted that the
petitioner-society has been formed for some
oblique and extraneous considerations which
is rightly considered by the appellate
authority to the effect that granting
registration to the petitioners-societies is
contrary to the Government instructions that
in the same village, another co-operative
society with same objects cannot be
registered. It was therefore, submitted that
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the impugned orders may not be interfered
while exercising extraordinary jurisdiction
under Article 227 of the Constitution of
India.
8.15) In support of his submissions,
learned Senior Advocate Mr. Jani relied upon
the following decisions :
I : On section 153 of the Act, 1961 :
1) Jitendra Natverlal Thaker v. Hirabag
Cooperative Housing Society Limited reported
in 1978 GLR 92.
2) Unchamala Mahila Dudh Utpadak Sahakari
Mandali Limited v. District Registrar,
Cooperative Society reported in 1999(3) GCD
1749.
3) Ucharapi Seva Sahakari Mandli Limited v.
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State of Gujarat reported in 2003(1) GCD 185.
4) Banaskantha District Co Op Union Ltd v.
State of Gujarat reported in 2011(2) GLR
1707.
II: On appeal by person who is not a party to
the proceedings :
1) Sm. K. Pnnalagu Ammal v. State of Madras
reported in AIR 1953 MAD 485.
2) Jatan Kanwar Golcha v. Golcha Properties
Private Limited reported in 1970 (3) SCC 573.
3) Baldev Singh Vv. Surinder Mohan Sharma
reported in 2003(1) SCC 34.
4) Hardevinder Singh v. Paramjit Singh
reported in 2013 (9) SCC 261.
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5) V.N. Krishna Murthy & Anr. v. Ravikumar
& Ors reported in 2020(9) SCC 501.
III: On interim orders are not precedent :
1) State of Assam v. Brak Upatyaka D.U.
Karmachari Sanstha reported in 2009(5) SCC
694.
2) Roger Shashoua v. Mukesh Sharma reported
in 2017(14) SCC 722.
IV: For alternative remedy of revision under
section 155 of the Act, 1961 :
1) State of Uttar Pradesh and another v.
Uttar Pradesh Rajya Khanij Vikas Nigam
Sangharsh Samiti and others reported in
(2008) 12 Supreme Court Cases 675, wherein
the Apex Court held that writ petition under
Article 226 is not maintainable as under :
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"37. We have given most anxious and
thoughtful consideration to the
rival contentions of the parties. So
far as preliminary objection raised
by the Corporation before the High
Court is concerned, in our
considered view, the same was well-
founded and ought to have been
upheld. It was urged before the High
Court on behalf of the Corporation
and the State Government that the
writ petition was premature inasmuch
as no retrenchment had been
effected. Several disputed questions
of fact were involved in the
petition. If the contention of the
Samiti was that there was illegal
closure of Undertaking or there was
non-payment of wages by the
employer, appropriate proceedings
could have been initiated under
Industrial Law. In fact, one of the
Judges of the Division Bench upheld
the contention and observed that the
employees could have claimed closure
compensation under Section 25 FFF of
the Act or could have approached
prescribed authority under the
Payment of wages Act relying upon
Section 33C(2) of the Act or Section
6H(2) of the U.P. Industrial
Disputes Act. The other Single Judge
of the Division Bench, however, held
that the writ petition had been
entertained and interim orders were
also passed. Relying upon Suresh
Chandra Tewari, the learned Judge
held that "the petition cannot be
dismissed on the ground of
alternative remedy if the same has
been entertained and interim order
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has been passed". (emphasis
supplied).
38. With respect to the learned
Judge, it is neither the legal
position nor such a proposition has
been laid down in Suresh Chandra
Tewari that once a petition is
admitted, it cannot be dismissed on
the ground of alternative remedy. It
is no doubt correct that in the
'head note' of All India Reporter
(AIR), it is stated that "petition
cannot be rejected on the ground of
availability of alternative remedy
of filing appeal". But it has not
been so held in the actual decision
of the Court. The relevant paragraph
2 of the decision reads thus:
"2. At the time of hearing of
this petition a threshold
question, as to its
maintainability was raised on
the ground that the impugned
order was an appealable one and,
therefore, before approaching
this Court the petitioner should
have approached the appellate
authority. Though there is much
substance in the above
contention, we do not feel
inclined to reject this petition
on the ground of alternative
remedy having regard to the fact
that the petition has been
entertained and an interim order
passed".(emphasis supplied)
Even otherwise, the learned Judge
was not right in law. True it is
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that issuance of rule nisi or
passing of interim orders is a
relevant consideration for not
dismissing a petition if it appears
to the High Court that the matter
could be decided by a writ-Court. It
has been so held even by this Court
in several cases that even if
alternative remedy is available, it
cannot be held that a writ- petition
is not maintainable. In our
judgment, however, it cannot be laid
down as a proposition of law that
once a petition is admitted, it
could never be dismissed on the
ground of alternative remedy. If
such bald contention is upheld, even
this Court cannot order dismissal of
a writ petition which ought not to
have been entertained by the High
Court under Article 226 of the
Constitution in view of availability
of alternative and equally
efficacious remedy to the aggrieved
party, once the High Court has
entertained a writ-petition albeit
wrongly and granted the relief to
the petitioner."
2) Full Bench decision of this Court in
case of Jayendrasinh Bhupatsinh Diama v.
State of Gujarat through Additional Secretary
(Inquiry) reported in 2012 (2) GLR 1096,
wherein the Full Bench held that where
appellate powers are exercised, revision
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powers can also be exercised.
3) Chimanbhai Dadubhai Desai v.
Chaturbhai P. Patel, District Registrar
Cooperative Societies reported in 1971 GLR
31, wherein it is held as under :
"5. We are, therefore, of the view
that the Joint Registrar,
Administration and Appeals was in
error in taking the view that no
revision application lay against an
order made by the District Registrar
directing an inquiry under Section
86 sub-section (1) and he wrongly
refused to exercise jurisdiction
which was vested in him by Section
155. We therefore, issue a writ of
certiorari quashing and setting
aside the order dated 15th October
1969 passed by the Joint Registrar,
Administration and Appeals,
rejecting the revision application
of the petitioner and direct him to
entertain the revision application
under Section 155 and to decide it
after complying with the principles
of natural justice. In this view of
the matter it is not necessary for
us to issue a rule as regards the
other reliefs claimed in the
petition in regard to the order of
the District Registrar under Section
86 sub-section (1). The third
respondent will pay the costs of the
petition to the petitioners."
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V: Under section 4 of the Act, 1961 :
1) B.B. Shroff v. Sardar Bhilandwala Pardi
Peoples Co-Operative Bank Limited reported in
1981 GLR 805, wherein it is held as under :
"4. On a bare perusal of the
statutory provisions, it would
appear that the power of the
Registrar to register an amendment
is to be exercised upon his being
satisfied that the proposed
amendment is not 40 "contrary to
this Act or the rules". If the
proposed amendment is contrary to
the pro visions of the Act or Rules-
and this requirement necessitates
taking into consideration all the
provisions of the Act or Rules, the
Registrar will have no power to
register the amendment.
5. Section 4 is a pivotal provision
in the Act. It provides that a
society, which has as its object the
promotion of the economic interests
or general welfare of its members,
or of the public, in accordance 45
with co-operative principles, or a
society established with the object
of facilitating the operations of
any such society, may be registered
under the Act. The proviso to the
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said section, which is material,
reads as under :
"Provided that it shall not be
registered if, in the opinion of
the Registrar, it is
economically unsound, or its
registration may have any
adverse effect upon any other
society, or it is opposed to, or
its working is likely to be in
contravention of public policy."
It would appear, therefore, that
only such society can be registered
under the Act which is to function
on co-operative principles and the
registration of which, in the
opinion of the Registrar, will not
have an adverse effect upon any
other society. This provision, which
has been enacted to apply at the
stage of registration of a society,
is relevant even at the stage of
considering the question whether to
register an amendment of the by-laws
of a society, by reason of the
provisions of sec. 13 (2). If it is
found, therefore, upon examination
of all the relevant facts and
circumstances of a given case, that
the registration of an amendment of
the by-laws of a society whereunder,
for example, the area of operation
of the society is to be extended, is
likely to undermine the co-operative
principles or to have an adverse
effect upon any other society, such
amendment could not possibly be said
to be in accordance with the Act or,
to put it negatively, not contrary
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to the Act and, therefore, the
Registrar cannot possibly grant
registration to such an amendment.
6. In the instant case, the
petitioner society is a banking co-
operative society and so is the
first respondent society. The
grievance of the petitioner-society
is that by registering the amendment
of the by-laws, which extends the
area of operation of the first
respondent society to the area in
which the petitioner-society is
already operating, there will be
unhealthy competition. This is a
relevant aspect to be considered, if
true. The attention of the authority
registering the amendment was
required to be focused upon this
aspect of the matter and the
decision with regard to registration
of the amendment of the by-laws
could only have been arrived at
after it was found, upon
investigation of all the relevant
facts and circumstances, that the
registration of the amendment of the
by-laws extending the area of
operation is not likely to have an
adverse effect upon the petitioner
society and to undermine the co
operative principles in general. The
order of the original authority
being not before me, it is not as
possible to ascertain whether this
perspective was kept in mind. The
order of the appellate authority
does not disclose that this
perspective was present to its mind.
Under the circumstances, the
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conclusion is inevitable that the
power with regard to registration of
the amendment of the by-laws is
exercised without applying mind to
the most relevant aspect and to the
fundamental questions which were
required to be taken into account.
7. Under the circumstances, both the
order dated 23.04.1979 and the order
dated 29.05.1980 are quashed and set
aside. The second respondent will
consider afresh the question of
registration of the seriously
contesting the proposed amendment of
the by-laws of the first respondent-
Society, it would be in the interest
of justice to direct the second
respondent to afford to the said
Society an opportunity of being
heard before arriving at a final
decision."
2) Madarsing B. Rajput v. State of Gujarat
and others (judgment dated 23.06.2014
rendered in Special Civil Application
No.15334/2004 and allied matters), wherein it
is held as under:
"6.The question of registration of
rival societies in the same field of
operation in the same area has
occupied attention of this Court on
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several occasions. The State
Government also in consonance
with section 4 of the
Gujarat Cooperative Societies
Act, 1961 and the Rules
made thereunder, has been
issuing circulars containing
guidelines for governing such
applications. Section 4 of the
Gujarat Cooperative Societies Act,
1961 provides that for the
purpose of securing
registration of a proposed
society, in addition to
establishing that it fulfills
requirements of main body of the
section, the authorities have to
additionally examine whether
any part of the proviso is
applicable and that therefore, it
would not be desirable to grant
registration to such a society. If
it is found that registration of
such proposed society may have an
adverse effect upon any
other society, such society
would not be registered. The
philosophy behind this principle
is that in the cooperative movement,
there should not be element of
unhealthy competition between the
rival societies operating in the
same field.
7. In context of milk cooperative
society, the Government of Gujarat
issued a circular dated 23.8.1982
pointing out to the District
Registrar that it has come to the
notice of the Government that in the
same village parallely more than one
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milk cooperative society have
been operating. The policy of
the Government has been to permit
establishment of only one
cooperative milk society in the same
village along Amul pattern. This is
not being consistently followed. It
was therefore, conveyed to the
District Registrar that such
policy of registering only one
cooperative milk society in the
same village be strictly
followed. Further clarifications
were issued by the State
Government in circulars dated
8.9.1989 and 7.11.1989 to some
extent relaxing the rigors of
the previous guidelines and
the directives issued under
abovenoted circular dated
23.8.1982. It was provided interalia
that ordinarily in one village
only one milk cooperative
society would be registered
except in cases where on
account of geographical reasons
such as long distance or where the
outer area of village are
intercepted by river, rivulets or
ravines leading to difficulty or
complete inaccessibility to the
main village, in such
cases, application can be
considered provided financial
condition of the existing
society is not adversely
affected and additional milk
is likely to be available.
If there is possibility of
daily collection of 80 to 100 litres
on an average, another society could
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be viable, however, before taking
any such decision to register
another society, it should be
examined whether it is possible to
set up milk collection centre of the
existing society.
16. As noted, it was the
revisional authority which
reversed the orders of the appellate
authority and cancelled the
registration granted to the
petitioner. There was already an
existing group cooperative society
in the same village. The revisional
authority noted that previously this
existing society had field of
operation in eight villages and had
nearly 2095 members. Over a
period independent societies were
registered in six out of these eight
villages. Field of operation of
group society was thus confined to
only eight villages. It was noted
that if the proposed society is
registered in the same village,
there will be two societies with the
same objections that would come into
existence in the village. This would
adversely affect the existing
society. Because of separation of
other society in other villages, the
existing group cooperative
society's field of operation
is virtually confined to one village
Jadiya. Such society had nearly 2095
members. Because of separation of
village, this number would come
down considerably. In the
same village, it will not be viable
to register two societies. In my
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opinion, revisional authority
has given cogent reasons which
are supported by materials
on record. From the affidavit
in reply filed by respondent no.1,
one can gather that population
of the village is about
5000. Village Rampur, the other
village in which respondent no.1
still had field of operation had
population of 1597 residents.
Considering such facts, in exercise
of writ jurisdiction, I do not see
any reason to interfere.
When the revisional authority on
materials on record came to the
conclusion that registering another
society in the same village in the
same field of operation would
adversely affect the existing
society, such decision is not
required to be interfered with. As
noted, Government circulars laying
down the guidelines for considering
cases under the provision of section
4 of the Gujarat Cooperative
Societies Act, 1961,
essentially recognise the principle
that as a rule there should be one
cooperative society in one village.
This would be subject to exceptions.
At all times however, the basic
principle of the statute that
registration of a new society should
not in any manner have adverse
effect on any other society would
be a guiding factor. Ms.
Jani for the petitioner
however, vehemently contended
that in six other villages,
independent cooperative societies
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were registered. In one such case
in village Bhatib, the
revision petition was rejected.
This Court confirmed the
order of appellate authority
reversing the order of revisional
authority. She further contended
that the petitioner society
came into existence and also
started its operations. It operated
till the revisional authority passed
the impugned order. Drawing my
attention to another decision of the
revisional authority dated 1.11.2008
as at AnnexureAA2, she contended
that in such a situation, it will
not be advisable to discontinue the
registration of society since
it would give rise to
multiple set of proceedings. In my
opinion however, neither of the two
contentions would convince me to
allow the petition. Each case must
be judged on its facts. In the
present case, facts are eloquent.
Revisional authority has given
detailed reasons why in terms of
provision of section 4 of the
Gujarat Cooperative Societies
Act, and the guidelines issued
by the Government,
registration of society would not
be advisable or even permissible.
The applications of other
societies in other villages
would depend on the material
that may be available in
such cases. Secondly, in order
dated 1.11.2008, no such
principle has been laid down that
once an order is passed and the
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society is registered, such
registration can never be cancelled
irrespective of facts. No such
principle flows from any other
statutory provisions. To
suggest that once registration
is granted, the same cannot
be withdrawn would be severely
restricting the revisional
authorities powers which the statute
does not suggest. It may be that
granting of registration and
a society enjoying such
registration for a long period of
time may be a factor, to dissuade
the appellate or revisional
authority to withdraw the same. No
proposition can be laid down that
once such registration is granted
irrespective of factual and
legal aspects involved, such
registration cannot be withdrawn."
9. Learned advocate Mr.V.C.Vaghela and learned
Assistant Government Pleader Mr.Dhawan
Jayswal adopted the arguments and submissions
made by learned Senior Advocate Mr. Prakash
Jani defending the order passed by the
appellate authority cancelling the
registration of the petitioners-societies.
10. In rejoinder, learned advocate Mr.Dipen
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Desai submitted that insofar as reliance
placed on behalf of the respondent on the
decision in case of Vachhol Dudh Utpadak
Sahakari Mandali Limited (supra) is
concerned, the said judgment nowhere provides
right to the existing societies to file an
appeal. It was pointed out that paragraph no.
18 of the said judgment only records that by
necessity as well as convention, locus standi
of such existing societies to question grant
of registration to a new society has been
recognised. It was therefore, submitted that
only observation made was that the appeals of
the existing society as a matter of fact are
being entertained however, that would not by
itself confer upon the existing societies any
right of appeal under section 153 of the Act,
1961. It was submitted that in the said
judgment the issue was not decided as to
whether the existing society has any right of
appeal against registration granted to a new
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society. It was submitted that on the
strength that the appeals are being
entertained by necessity and convention, it
was observed by this Court that the existing
society will have the right to submit
objections before the Registering authority.
10.1) Learned advocate Mr. Desai referred
to and relied upon the observations of
paragraph no.19 of the said decision wherein
it is made clear that only by virtue of
raising objections, the objector would not
ipso facto enjoy a right to be heard or
prefer an appeal against the order which may
be passed and such rights will be governed on
the basis of facts arising in individual
cases. It was therefore submitted that only
because the existing society is granted
opportunity to file objections against the
application for registration of new society,
it is specifically observed by this Court
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that only by virtue of raising objections,
the objector would not ipso facto enjoy a
right to be heard or right to file appeal
against the order of granting registration.
10.2) It was further submitted that the
issue in respect of submission of the
petitioners has been considered in detail in
case of Rameshbhai Maganbhai Lakhani (supra),
wherein it is held by this Court that the
existing society does not have any right to
file an appeal against the order of
registration because granting of registration
is neither judicial or quasi judicial
function but the same falls within the realm
of administrative exercise to be undertaken
by the Registrar.
10.3) It was therefore, submitted that the
decision in case of Vachhol Dudh Utpadak
Sahakari Mandali Limited (supra) does not lay
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down any ratio or proposition that existing
society has right to prefer an appeal against
the registration granted to the new society
whereas in case of Rameshbhai Maganbhai
Lakhani (supra), it is held by this Court
that the process of registration of a new
society cannot be termed to be judicial or
quasi judicial so as to envisage an
adversarial approach from the existing
society so as to give right to the existing
society to file an appeal under section 153
of the Act, 1961.
10.4) Learned advocate Mr. Desai submitted
that so far as Special Civil Application Nos.
9907/2021 to 9910/2021 are concerned,
admittedly the area of the petitioners-
societies and area of the existing societies
who have filed appeals are different and
therefore, there is no question of adversely
effecting to the existing societies.
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10.5) The Undisputed facts in Special
Civil Application Nos.9907/2021 to 9910/2021
are as under :
Sr. SCA No. Name of Registration Remarks
No the challenged
petitioner
society
1 9907/2021 The Pankajbhai Area of operation
Ashapura Arjanbhai of petitioner and
Mahila Patel, respondent No.3 is
Arthaksham Chairman different. The
Seva Jamiyatpura respondent No.3 is
Sahakari Seva Sahakari situated at a
Mandali Mandali distance of 22 kms.
Limited Limited See paragraph No.
2.13 of the memo of
petition.
Further the
petitioner society
is the women's
society whereas the
respondent No.3 is
not the women's
society.
2 9908/2021 The Jayeshbhai Area of operation
Sarvodaya Mulshankar of both the
(Laghumati) Upadhya, societies is
Seva Committee Balasinor, which is
Sahakari Member of the a municipality area
Mandali Balasinor having population
Limited Seva Sahakari of more than 45000
Mandali persons. No member
Limited common. See
paragraph No. 2.14
of the memo of
petition.
Further the appeal
is filed by the
individual member
of the society and
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not by the existing
society.
3 9909/2021 The Natwarsinh Area of operation
Gorpuralat Adarsinh of both the
Mahila Rathod, societies is
Arthaksham Chairman of different. The
Seva Parabiya respondent No.3 is
Sahakari (Vasadara) situated at a
Mandali Seva Sahakari distance of 11 kms.
Limited Mandali From the
Limited petitioner. See
paragraph No. 2.13
of the memo of the
petition.
4 9910/2021 The Vasarda Natwarsinh Area of operation
Mahila Adarsinh of both the
Arthaksham Rathod, societies is
Seva Chairman of different. The
Sahakari Parabiya village of the
Mandali (Vasadara) respondent No.3 is
Limited Seva Sahakari situated at a
Mandali distance of 11 kms.
Limited See paragraph No.
2.13 of the memo of
the petition.
10.6) It was therefore, submitted that in
all these petitions, the appellate authority
has exercised jurisdiction though no appeal
was maintainable and even on merits, there is
no violation of proviso to section 4 of the
Act, 1961 so as to deny registration to the
petitioners-societies.
11. Having heard the learned advocates for
the respective parties and having considered
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the materials placed on record, the following
questions arise for consideration in the
facts of the case :
1) Whether in the facts of the case, the
orders granting registration by the District
Registrar to the petitioners-societies can be
challenged under section 153 of the Act,
1961?
2) Whether these petitions are
maintainable?
3) If answer to the above question is in
affirmative, whether these petitions are
maintainable in view of alternative
efficacious remedy available to prefer
revision application under section 155 of the
Act, 1961 so as to challenge the order passed
under section 153 of the Act, 1961?
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4) Whether in facts of the case,
registration of the petitioner society would
have any adverse effect on the existing
society so as to refuse the registration
under the proviso to section 4 of the Act,
1961?
12. It would therefore, be germane to refer
to relevant provisions of the Act, 1961 as
under :
"4. Societies which may be registered
A society, which has as its object
the promotion of the economic
interests or general welfare of its
members, or of the public, in
accordance with cooperative
principles, or a society established
with the object of facilitating the
operations of any such society, may
be registered under this Act:
Provided that it shall not be
registered if, in the opinion of the
Registrar, it is economically
unsound, or its registration may
have an adverse effect upon any
other society, or it is opposed to,
or its working is likely to be in
contravention of public policy.
8. Application for registration.
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(1) For the purposes of
registration, an application shall
be made to the Registrar in the
prescribed form, and shall be
accompanied by four copies of the
proposed bye-laws of the society.
The person by whom, or on whose
behalf, such application is made,
shall furnish such information in
regard to the society, as the
Registrar may require.
(2) The application shall be signed-
(a) in the case of a society other
than a federal society, by at least
ten persons (each of such persons
being a member of a different
family) who are qualified under this
Act, and
(b) in the case of a federal
society, by at least (ten
societies).
(3) No signature to an application
on behalf of a society shall be
valid unless the person signing is a
member of the committee of such
society, and is authorized by the
committee by resolution to sign on
its behalf the application for
registration of the society and its
bye-laws; and a copy of such
resolution is appended to the
application.
9. Registration and provisional
registration, certificate of
registration -
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(1) On receipt of an application for
registration from a society--
(a) if the Registrar is satisfied
that the society has complied with
the provisions of this Act and the
rule as to registration and that its
bye-laws are not contrary to this
Act and the rules, he shall register
the society and its bye-laws; and
(b) if the Registrar is of opinion
that the application complies with
the requirements of section 8 but
that its bye-laws are not in
conformity with the provisions of
this Act and the rules, he may
provisionally register the society
and by an order in writing permit
the society to perform such
functions subject to such conditions
as he may specify in the order and
may also by an order in writing
direct the society to amend within
the period prescribed in this behalf
its bye-laws so as to bring them in
conformity with this Act and the
rules.
(2) When a society has been
provisionally registered, the
Registrar shall, on its compliance
with the order made under clause (b)
of sub-section (1) finally register
it and its bye-laws, and on its
failure to comply with the order
shall cancel its provisional
registration.
(3) A provisionally registered
society shall not be deemed to be a
society registered under this Act.
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(4) On the registration of a
society, the Registrar shall issue
to it a certificate of registration
signed by him.
(5) A certificate of registration
issued under sub-section (4) shall
be conclusive evidence that the
society therein mentioned is duly
registered, unless it is proved that
the registration has been cancelled.
(6) If the Registrar refuses to
register the society, he shall
forthwith communicate his decision
with reasons therefor, to the person
who has signed first on the
application.
153. Appeals
(1) An appeal against an order or
decision under sections 4, 9, 11,
13, 17, 19, 36, 81 and 160 shall
lie-
(a) if made or sanctioned or
approved by the Registrar, or an
Additional or Joint Registrar on
whom powers of the Registrar are
conferred, to the State Government.
(b) if made or sanctioned by any
person other than the Registrar, or
an Additional or Joint Registrar on
whom the powers of the Registrar are
conferred, to the Registrar.
(2) An appeal against an order of a
liquidator under section 110 shall
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lie--
(a) to the State Government if the
order was made with the sanction or
approval of the Registrar, and
(b) to the Registrar in any other
case.
(3) An appeal against an order or
decision under sections 82,90,93 and
any order passed by the Registrar
for paying compensation to a
Society, and any other order for
which an appeal to the Tribunal has
been provided under this act, shall
lie to the Tribunal.
(4) An appeal under sub-section (1),
(2) or (3) shall be filed within two
months of the date of the
communication of the order or
decision.
(5) The procedure to be followed in
presenting and disposing of appeals
under this section or under any
other provisions of this Act shall
be such as may be prescribed.
(6) As provided in this Act, no
appeal shall lie against any order,
decision or award passed in a
accordance with this Act; and every
such order, decision or award shall
be final, and where any appeal has
been provided for, any order passed
on appeal shall be final and no
further appeal shall lie against it.
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155. Power of the State Government
and Registrar to call for
proceedings of subordinate officers
and to pass orders thereon
The State Government and the
Registrar may call for and examine
the record of any inquiry or the
proceedings of any other matter of
any officer subordinate to them,
except those referred to in sub-
section (9) of section 150, for the
purpose of satisfying themselves as
to the legality or propriety of any
decision or order passed, and as to
the regularity of the proceedings of
such officer. If in any case, it
appears to the State Government, or
the Registrar, that any decision or
order or proceedings so called for
should be modified, annulled or
reversed, the State Government or
the Registrar, as the case may be,
may after giving persons affected
thereby an opportunity of being
heard pass such order thereon as it
or he may deem just."
13. On perusal of the above provisions, it
is clear that registration of a cooperative
society is an administrative function as held
by this Court in case of Rameshbhai Maganbhai
Lakhani (supra) as under :
"21.In order to appreciate the scheme of
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registration of co-operative society it
would be expedient to set out the
relevant provisions and or its relevant
extracts. The provision of Section 4 of
the Gujarat Co-operative Societies Act
1961 be set out as under:-
" Section 4. Societies which may be
registered.- A society, which has as
its object the promotion of the
economic interests or general
welfare of its members or of the
public, in accordance with co-
operative principles, or a society
established with the object of
facilitating the operations of any
such society, may be registered
under this Act:
Provided that it shall not be
registered if, in the opinion of the
Registrar, it is economically
unsound, or its registration may
have an adverse effect upon any
other society, or it is opposed to ,
or its working is likely to be in
contravention of public policy."
The provisions of Section provides for
registration with limited or unlimited
liability, Section 6 lays down the
conditions for registration, Section 7
empowers the State to exempt certain
societies from the requirement of
registration. Section 8 talks about
Application for Registration and Section
9 provides for actual and elaborate
procedure for registration. The
provisions of Section 9 therefore needs
to be set out as under:
"Section 9;-
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Registration provisional
registration , certificate of
registration -
(1) On receipt of an application for
registration from a society
(a) if the Registrar is satisfied
that the society has complied with
the provisions of this Act and the
rules as to registration and that
its bye -laws are not contrary to
this Act and the rules he shall
register the society and its bye-
laws; and
(b) if the Registrar is of the
opinion that the application
complies with the requirements of
Section 8 but that its bye-laws are
not in conformity with the
provisions of this Act and the
rules, he may provisionally register
the society and by an order in
writing permit the society to
perform such functions subject to
such conditions as he may specify in
the order and may also by an order
in writing direct the society to
amend within the period prescribed
in this behalf its bye-laws so as to
bring them in conformity with the
provisions of the Act and the rules.
(2) When a society has been
provisionally registered, the
Registrar shall on its compliance
with the order made under clause (b)
of subsection (1) finally register
it and its bye-laws and on its
failure to comply with the order
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shall cancel its provisional
registration.
(3) A provisionally registered
society shall not be deemed to be a
society registered under this Act.
(4) On the registration of a society
the Registrar shall issue to it a
certificate of registration signed
by him.
(5) A certificate of registration
issued under subsection (4) shall be
conclusive evidence that the society
therein mentioned is duly
registered, unless it is proved that
registration has been cancelled.
(6) If the Registrar refuses to
register the society he shall
forthwith communicate his decision
with reasons thereof to the person
who has signed first on the
application."
The plain reading of these provisions do
not indicate any where that there is any
restriction on numbers of registered
societies in an area. In fact such
restriction cannot be even envisaged in
view of the provisions of Article 19(1)
(C) of the Constitution of India. The
cooperative movement as such is required
to be encouraged and widely spread as to
encompass as many persons as possible
for their common economic development
and in turn for healthy development of
entire society on democratic principles.
The provisions of section 4 casts duty
upon the Registrar to register the
cooperative society which has as its
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object the promotion of the economic
interest or general welfare of its
members or of the public in accordance
with co-operative principles or even a
society established with the object of
facilitating the operation of any such
society and the proviso thereto makes an
exception to this general duty to
register namely that if the Registrar is
of the opinion that;
(1) it is economically unsound or
(2) its registration may have an adverse
effect upon any other society or
(3) it is opposed to or its working is
likely to be in contravention of public
policy.
Thus an exception to the rule of
registration is carved out and Registrar
is enjoined not to register a
cooperative society if he forms an
opinion that registration is hit by any
of the above mentioned three factors.
The forming of an opinion under the
proviso to section 4 of the Gujarat Co-
operative Societies Act 1961 is a
statutory function to be undertaken by
the statutory authority and the plain
reading of this provision do not
indicate involvement of any other third
party or any adversary or rival society.
In other words legislative intent as is
apparent from the plain and simple
language of the Section 4 of the Gujarat
Cooperative Societies Act 1961does not
envisage or encourage any participation
of third party, be it society, or any
other organization, nor does it
therefore create any enforceable right
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into any of the entity, agency or other
society against the society whose
proposal is under consideration by the
Registrar. Therefore it needs to be
borne in mind that plain and simple
reading of Section 4 does not vests any
other existing society with any right to
even lodge it's objection to
registration of new society. Had it been
the legislative intent than nothing
prevented the legislature from expressly
provide for it.
22.In order to appreciate this aspect in
more detail it would be expedient to
refer to the provisions of section 6 ,
8, and 9 of the Gujarat Co-operative
Societies Act 1961. In none of the
provisions, the proposed society, its
proposer, or the Registering Authority
is required to invite objections from
any agency, organization or even
existing society while making an
application for registration or while
considering it for registration. The
relevant rule no. 3 and other rules
framed under the provisions of the
Gujarat Co-operative Societies Act 1961,
also do not provide for such invitation
of objections and their consideration.
23.The legislative intent apparent from
the provisions of Section 4, 9 of the
Gujarat Co-operative Societies Act
1961was in fact in consonance with the
provisions of Article 19(1)(c) of the
Constitution of India. The 5 Judge bench
of the apex court has in case of Smt.
Damyanti Narang Vs. Union of India
reported in AIR 1971 SUPREME COURT 966
has held that the right to form an
association, necessarily implies that
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the persons forming the association have
also the right to continue to be
associated with only those whom they
voluntarily admit in the association.
Any law, by which members are introduced
in the voluntary Association without any
option being given to the members to
keep them out, or any law which takes
away the membership of those who have
voluntarily joined it, will be a law
violating the right to form an
association. The Hindi Sahitya Sammelan
Act did not merely regulate the
administration of the affairs of the
original society; but it in fact altered
the composition of the society itself.
The result of this change in composition
was that the members, who voluntarily
formed the Association, were compelled
to act in that Association with other
members who had been imposed as members
by the Act and in whose admission to
membership they had no say. Such
alteration in the composition of the
Association itself clearly held to be
interfering with the right to continue
to function as members of the
Association which was voluntarily formed
by the original founders. The Act,
therefore, held to be violating the
right of the original members of the
Society to form an association
guaranteed under Art, l9 (1) (c).
Article 19 (4), on the face of it, could
not be called in aid to claim validity
for the Act. The alteration of the
constitution of the Society the manner
laid down by the Act was not in the
interests of the sovereignty and
integrity of India or in the interests
of public order or morality. Thus
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citizens have fundamental right in
Article 19(1)(c) to form association
with the persons of their liking and
choice. The provisions of Section 4
especially proviso to it therefore if
viewed from this angle, needs to be
construed in proper perspective so as to
read it in consonance with provisions of
article 19(1)(c) of the Constitution.
24.The apex court has in case of
Zoroastrian Cooperative Housing Society
Ltd. and another, Appellants v. District
Registrar, Co-operative Societies
(Urban) reported in AIR 2005 SUPREME
COURT 2306 observed as under :
"11.The cooperative movement, by its
very nature, is a form of voluntary
association where individuals unite
for mutual benefit in the production
and distribution of wealth upon
principles of equity, reason and
common good. No doubt, when it gets
registered under the Cooperative
Societies Act, it is governed by the
provisions of the Cooperative
Societies Act and the Rules framed
thereunder. In Damyanti Naranga v.
Union of India and others (AIR 1971
SC 966), this Court, discussing the
scope of the right to form an
association guaranteed by Article
19(1)(c) of the Constitution of
India, stated that the right to form
an association necessarily implies
that the persons forming the
association have also the right to
continue to be associated with only
those whom they voluntarily admit in
the association. Any law, by which
members are introduced in the
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voluntary Association without any
option being given to the members to
keep them out, or any law which
takes away the membership of those
who have voluntarily joined it, will
be a law violating the right to form
an association. Based on this
decision, it is contended on behalf
of the Society that its members have
the right to be associated only with
those whom they consider eligible to
be admitted and the right to deny
admission to those with whom they do
not want to associate, cannot be
interfered with by the Registrar by
imposing on them a member who
according to them was not eligible
to be admitted. The argument on this
basis is sought to be met on behalf
of the respondents by reference to
another decision of this Court in
Daman Singh and others, etc. v.
State of Punjab and others, etc.
(AIR 1985 SC 973). Therein, their
Lordships, after referring to
Damyanti (supra), held that decision
had no application to the situation
before them. The position was
explained in the following words:-
"That case has no application
whatever to the situation before us.
It was a case where an unregistered
society was by statute converted
into a registered society which bore
no resemblance whatever to the
original society. New members could
be admitted in large numbers so as
to reduce the original members to an
insignificant minority. The
composition of the society itself
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was transformed by the Act and the
voluntary nature of the association
of the members who formed the
original society was totally
destroyed. The Act was, therefore,
struck down by the Court as
contravening the fundamental right
guaranteed by Art. 19(1)(f). In the
cases before us we are concerned
with co-operative societies which
from the inception are governed by
statute. They are created by
statute, they are controlled by
statute and so, there can be no
objection to statutory interference
with their composition on the ground
of contravention of the individual
right of freedom of association."
It is emphasized that the principle
recognized in the Damyanti's case
(supra) was not applicable to a co-
operative society since it is a
creature of a statute, the
Cooperative Societies Act and that
the rights of its members could be
abridged by a provision in the Act.
Regarding the rights of an
individual member, their Lordships
have stated:
"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."
12.Daman Singh's case (supra), in
our view, is not an answer to the
claim of the Society that it had the
right to decide with whom it wants
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to associate or to deny membership
to a person who was not qualified to
be one in terms of the bye-laws of
the Society. The effect of the
observations in Daman Singh's case
(supra), is only that cooperative
societies, from their very inception
are governed by the statute, the
Cooperative Societies Act, that they
are created by statute, they are
controlled by the statute and so,
there can be no objection to
statutory interference with their
composition or functioning and no
merit in a challenge to statutory
interference based on contravention
of the individual right of freedom
of association. As we understand the
statement of the law by this Court
in Daman Singh's case, it only means
that the action of the Society in
refusing membership to a person has
to be tested in the anvil of the
provisions of the Act, the Rules and
its bye-laws. Be it noted that the
bye-laws had already been approved
on the basis that it is consistent
with the Act and the Rules. Even
then, it may be possible in a given
case to point out that a particular
bye-law was against the terms of the
Act or the Rules. Daman Singh does
not indicate that the Act, the Rules
and the bye-laws for that matter,
have to be given the go-by, merely
because the particular bye-law or
action of the Society may not accord
with our concept of fairness or
propriety in terms of the rights
available to an ordinary citizen.
Therefore, in the light of the
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observations in Daman Singh what one
has to search for, is a provision in
the Act or the Rules which prevails
over bye-law No. 7 of the Society,
confining membership in it, to only
a person who is a Parsi. Section 24
of the Act, no doubt, speaks of open
membership, but Section 24(1) makes
it clear that, that open membership
is the membership of a person duly
qualified therefor under the
provisions of the Act, the Rules and
the bye-laws of the Society. In
other words, Section 24(1) does not
contemplate an open membership
dehors the bye-laws of the Society.
Nor do we find anything in the Act
which precludes a society from
prescribing a qualification for
membership based on a belief, a
persuasion or a religion for that
matter. Section 30(2) of the Act
even places restrictions on the
right of a member to transfer his
right. In fact, the individual right
of the member, respondent No.2, has
got submerged in the collective
right of the Society. In State of
U.P. and another v. C.O.D. Chheoki
Employees' Cooperative Society Ltd.
and others, (1997) 3 SCC 681, this
Court after referring to Daman
Singh's case (supra) held in
paragraph 16 that:
"Thus, it is settled law that no
citizen has a fundamental right
under Article 19(1)(c) to become a
member of a Cooperative Society. His
right is governed by the provisions
of the statute. So, the right to
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become or to continue being a member
of the society is a statutory right.
On fulfillment of the qualifications
prescribed to become a member and
for being a member of the society
and on admission, he becomes a
member. His being a member of the
society is subject to the operation
of the Act, rules and bye-laws
applicable from time to time. A
member of the society has no
independent right qua the society
and it is the society that is
entitled to represent as the
corporate aggregate. No individual
member is entitled to assail the
constitutionality of the provisions
of the Act, rules and the bye-laws
as he has his right under the Act,
rules, and the bye-laws and is
subject to its operation. The stream
cannot rise higher than the source."
13. Section 4, on which reliance is
placed, with particular reference to
its proviso, only speaks of denial
of registration if, in the opinion
of the Registrar, the Society to be
formed was economically unsound, or
its registration may have an adverse
effect upon any other Society, or it
is opposed to, or its working is
likely to be in contravention of
public policy. Prima facie, it may
have to be said that public policy,
in the context of Section 4 of the
Act, is the policy that is adopted
by the concerned Act and the Rules
framed thereunder. The concept of
public policy in the context of the
Cooperative Societies Act has to be
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looked for under the four corners of
that Act and in the absence of any
prohibition contained therein
against the forming of a society for
persons of Parsi origin, it could
not be held that the confining of
membership as was done by bye-law
No. 7, was opposed to public policy.
When a statute is enacted, creating
entities introduced thereunder on
fulfillment of the conditions laid
down therein, the public policy in
relation to that statute has to be
searched for within the four corners
of that statute and when so searched
for, one does not find anything in
the Act which prevents the Society
from refusing membership to a person
who does not qualify in terms of
bye-law No. 7 of the Society."
Thus as could be seen from the two
decisions of the apex court it becomes
clear that Citizens have rights to form
association and therefore by necessary
corollary it goes without saying that
citizens have right to form association
with those persons whom he like and he
has freedom to disassociate himself from
whom he dislikes. This right is
constitutional right and no one can
infringe it in any manner. As against
this citizen's right to become member of
a cooperative society is not his
fundamental right but merely a statutory
right and hence governed by the
Cooperative Societies Act, Rules and
bye-laws of that cooperative society. As
such its regulation by the State act or
intervention is not ruled out or found
to be repugnant to any provisions of the
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Constitution. Thus when a group of like
minded citizens get together and form
co-operative society than that society
has right to be registered except it is
found to be suffering from one of the
three handicaps envisaged in proviso to
Section 4 of the Gujarat Co-operative
Societies Act 1961.
25.Thus bearing in mind the prevalent
position of law, one can safely deduce
that leave alone individual members of
the existing society, even the existing
society did not have any statutory right
to lodge formal or substantial
objections against consideration of the
proposal for new societies based upon
the safeguard provided under proviso to
Section 4 of the Gujarat Co-operative
Societies Act 1961.
26.The aforesaid logical deduction from
the plain reading of the language of the
statutory provisions of Section 4 to 9
of the Gujarat Co-operative Societies
Act 1961 read with the decisions of the
apex court gets further strengthened
from plain reading of the provisions of
appeal as laid down in Section 153 of
the Gujarat Co-operative Societies Act
1961. The section 153 of the Gujarat
Cooperative Societies Act 1961 provides
appeal against orders made under various
provisions of Cooperative Societies Act
including order under Section 4 and 9.
The sub-section (4) of Section 153
period for two month limitation from the
date of the communication of the order
sought to be impugned in the appeal. Now
no provisions either in Section 4 to 9
or in Rules governing the registration
it is provided that order of
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registration is also to be communicated
to the existing societies or to any
objector as if it was an order made in
any adjudicatory or quasi judicial
proceedings. In short the entire
exercise of considering registration of
proposed societies under Section 4 to 9
is only an administrative exercise to be
undertaken by the Registrar and he has
to function in accordance with the
statutory provision. The process of
registration of new society cannot be in
any termed to be judicial or quasi
judicial so as to envisage an
adversarial approach from existing
society."
14. This Court in case of Vachhol Dudh
Utpadak Sahakari Mandali Limited (supra) has
held as under :
"17.However, despite these guidelines
emerging from statutory provisions as
well as State resolutions, one fact
cannot be ignored that there are
allegations of differential treatment
and discriminatory approach. The concern
voiced by learned advocates for the
petitioners that sometimes such
registration are misused for the purpose
of inflating voters list also may not be
completely baseless. Cooperative
movement in India is largely State aided
and regulated by the Statute. In case of
Zoroastrian Co-operative Housing Society
Ltd. and another v. District Registrar,
Cooperative Societies (Urban) and others
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
reported in AIR 2005 Supreme Court 2306,
though Hon'ble Supreme Court gave a
fillip to the concept of right to form
association and to be governed by a set
of rules that the members of the
Association may choose, nevertheless,
recognised that such rules(by-laws) of
the society must confirm to statutory
provisions. Over a period, cooperative
movement has gained momentum and
cooperative sector operates in vast
areas. Some of the cooperative societies
have significant operations and sizable
membership strength. State funds are
also involved in number of societies.
Involvement of the State on account of
its financial stake as well as larger
public interest is therefore,
inevitable. The provisions are
therefore, found in the said Act
permitting the State intervention.
Legislative and State intervention
however, cannot be confused with
political interference and it would
always be desirable that cooperative
movement to the extent possible enjoys
insulation from political consideration.
17.1 Thus even while recognising that
the existing statutory provisions as
well as Government guidelines provide
sufficient safeguard for consideration
of applications for grant of
registration of societies to ensure that
the implementation of such guidelines is
fair and that procedure is transparent,
certain directives are necessary.
18.While hearing these petitions, it is
found that large number of cases arise
out of existing societies opposing the
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registration of proposed societies in
the same area. At the time when
Registering authority is considering
such applications, existing societies
are not granted any hearing. Eventually,
when registration is granted to a new
society, existing societies carry the
issue further in appeal and revision.
The appeal and revision are entertained
at their instance and this Court also
has been entertaining the petitions at
the instance of such societies. Thus by
necessity as well as convention, locus
standi of such existing societies to
question grant of registration to a new
society has been recognised. Such
societies however, enjoy no right of
being heard before the applications of
rival societies are permitted. To my
mind, this is somewhat of contradictory
situation. If an existing society has
right to appeal against the registration
granted to a new society, such society
must also have a right to be heard
before the application of new society
for registration is granted. This would
be in consonance with the principles of
natural justice. This would also be in
larger interest since such society would
be, at the outset, in a position to
place material on record for
consideration of Registering authority.
As already noted section 4 of the said
Act provides that if in the opinion of
the Registrar, registration of a society
may have an adverse effect upon any
society, it shall not be registered.
This aspect has been further highlighted
in Government Resolution dated 18-7-
2003. It is provided inter-alia that it
should be ensured that in the same
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village in the same category not more
than one society should be registered.
This rule is not inviolable and for good
reasons exceptions can be made
particularly if it is found that
registering another society would have
no adverse effect on the existing
society. Nevertheless, existing society
would have a right to place material on
record and be heard to establish before
the authorities that such registration
should not be granted.
18.1 Considering these aspects of the
matter, it would be appropriate to
permit the existing societies operating
in the same field to raise their
objections and to be heard (not
necessarily in person) before
applications of new societies (covered
under said Government Resolution dated
18-7-2003) in the same village/group
villages are decided by the Registering
authority.
19.Above situation would however, arise
only in cases where primary village
level societies are fighting for
registration. In large number of
cooperative societies at different
levels however, such a situation may not
arise. In such other cases also,
question of adverse effect on existing
society would arise. It would be
desirable if the objections of other
societies which are likely to be
affected are taken into consideration by
the Registering authority before taking
a final decision regarding registering
of a new society. For the above purpose
since it would not be possible to
identify the society which may face
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ultimate adverse effect, it would be
appropriate that the Registering
authority upon receipt of application
for registration of a new society
exhibits a copy of such application on a
prominent place in the office for a
period of 10 days which would enable
other societies to raise their
objections, if any. In response to such
exhibiting of notice, if any objections
are raised before the Registering
authority, same should be taken into
account before deciding the application
for registration of a new society. It is
however, made clear that only by virtue
of raising objections, the objector
would not ipso facto enjoy a right to be
heard or appeal against the order which
may be passed and such rights will be
governed on the basis of facts arising in
individual cases."
15. In view of above two decisions of this
Court, it is clear that the Registrar is
required to call for objections from the
existing society so that it can be
ascertained as to whether there would be any
adverse effect on the working of the existing
society if the registration is granted to new
society. Accordingly, the respondent State
has also issued the resolutions directing the
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Registrar to invite objections from the
existing societies while granting
registration to the new society under section
9 of the Act, 1961. Therefore once the
existing society is granted an opportunity to
submit objections, the same is required to be
considered and disposed of by the District
Registrar.
16. It is true that sections 4 to 9 of the
Act, 1961 or the Rules governing the
registration do not provide to communicate
the decision of the Registrar accepting or
rejecting such objections to the existing
society or to any objector as order of
granting registration is only an
administrative exercise undertaken by the
Registrar as held by this Court in case of
Rameshbhai Maganbhai Lakhani (supra) and such
process of registration of new society is not
considered to be judicial or quasi judicial,
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so as to envisage adversarial approach from
the existing society but at the same time
when the Registrar refuses to grant
registration, he has to communicate the
decision with reasons under section 9(6) of
the Act, 1961. The provision of section 153
provides for an appeal against the order
passed under section 4 of the Act, 1961,
therefore, whether it is an order rejecting
the objections or an order to refuse the
registration, both would be orders passed
under section 4 of the Act, 1961. The appeal,
revision or petition are entertained by
necessity or convention as held by this Court
in both the cases of Vachhol Dudh Utpadak
Sahakari Mandali Limited (supra) and
Rameshbhai Maganbhai Lakhani (supra).
17. In facts of Rameshbhai Maganbhai Lakhani
(supra) the individual members of the
existing society challenged the order
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rejecting the objections and therefore, in
facts of the said case, it was held that
individual members of the existing society
cannot claim any right which is said to be
recognised in case of Vachhol Dudh Utpadak
Sahakari Mandali Limited (supra) with the
existing society only. In facts of the said
case it was therefore, submitted that
individual members would have no right to
challenge the order rejecting the objections
passed by the District Registrar.
18. However, in facts of the present
petitions, the respective existing societies
have challenged the orders rejecting the
objections passed by the District Registrar
under section 153 of the Act, 1961 and
therefore, such appeal would be maintainable
as held by this Court by necessity and
convention.
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19. Therefore, the question arises that if
appeal is maintainable whether there is an
alternative remedy by filing revision
application under section 155 of the Act,
1961 or not?
20. On perusal of section 155, revision
petition would be maintainable against the
order passed under section 153 of the Act,
1961 but in these petitions, the petitioners
have challenged jurisdiction of the appellate
authority to entertain the appeal under
section 153 of the Act, 1961 and therefore,
writ petition would be maintainable as held
by the Apex Court in case of Whirlpool
Corporation Vs. Registrar of Trade Marks,
Mumbai & Others, reported in (1998) 8 SCC 1
when the petitioner has challenged the
jurisdiction of the authority to pass the
order.
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21. In view of above analysis, decisions
relied on behalf of respondent no.2 for
question nos.1 to 3 formulated herein above
would not be applicable in the facts of the
case and therefore, they are not dealt with
in detail.
22. So far as the submissions made by
learned advocates on merits of the case is
concerned, the District Registrar in case of
Special Civil Application No. 16443/2020 has
considered the objections of respondent no.2
society in detail and has come to the
conclusion that there is no adverse effect
upon the existing society if the registration
is granted to the petitioner-society. However
an attempt was made by learned Senior
Advocate Mr. Jani to point out that
registration of the petitioner-society in
Vaghashar has adversely affected the
respondent no.2 society. But such facts are
already considered by the Registrar and
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therefore, the same cannot be re-appreciated
in a petition under Article 227 of the
Constitution of India. On the contrary the
petitioner has also pointed out that the
existing society respondent no.2 has
increased its volume of supply of milk to the
respondent no.4 many-fold in last three
years. Therefore, it cannot be said that the
Registrar has committed an error on facts of
the case by rejecting the objections of
respondent no.2 society. It is also pertinent
to note that respondent no.2 society at no
stage has raised any objection to the effect
that granting of registration would have
adverse effect on the existing society.
23. Moreover, contention raised on behalf
of the petitioners that the respondent
authorities have passed the impugned orders
at the time of holding of election of
respondent no.4-Union in case of Special
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Civil Application No. 16443/2020 and in other
cases, at the time of election of APMC,
Balasinor with an oblique motive for
depriving the petitioner to cast vote, cannot
be considered as there is nothing on record
substantiating such allegations made by the
petitioner except the timeline suggesting the
same.
24. It is pertinent to note that the
Government Resolutions relied upon by the
respondent no.2 to the effect that another
cooperative society cannot be registered in
the same village is reversed by the
Government Resolution dated 08.03.2019.
Therefore, after 2019, there can be two
societies for the same object in the same
village in consonance with Article 19(1)(c)
of the Constitution of India. Article 19(1)
(c) of the Constitution of India has been
inserted by 97th Amendment and reads as
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under :
"19. Protection of certain rights
regarding freedom of speech, etc- (1)
All citizens shall have the right-
xxx
(c) to form associations or unions, or
cooperative societies"
25. Thus every citizen or group of citizens
has right to form a cooperative society and
therefore, there cannot be any restriction on
such fundamental right enshrined under Part-
III of the Constitution of India subject to
restrictions which may be placed by the State
as enumerated under Article 19(4) of the
Constitution of India. Therefore, the
contention raised on behalf of the respondent
no.2 that in the same village, another
cooperative society with the same objects
cannot be formed, is without any basis and is
hereby rejected.
26. In view of above analysis of the
provisions of the Act, 1961 coupled with
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decisions relied upon by both the sides, it
appears that the appellate authority has
entertained the appeals without considering
the submissions made by the petitioners with
regard to the jurisdiction as well as on
merits of the case. In case of Special Civil
Application Nos. 9907/2021 to 9910/2021, it
is apparent that the existing societies are
situated far away from the petitioners-
societies as it is apparent from the facts of
each case narrated in tabular form herein
above which is not in dispute.
27. Therefore, considering the facts of each
of the case and in view of the legal position
as enumerated here in above, the impugned
orders passed by the appellate authority
under section 153 of the Act, 1961 are liable
to be quashed and set aside on merits.
28. The petitions are accordingly allowed.
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The impugned order dated 10.12.2020 passed by
respondent no.1-Additional Registrar
(Appeals) in Appeal no.53 of 2019 and
consequential order dated 11.12.2020 of the
respondent No.5-Election Officer in Special
Civil Application No.16443 of 2020, impugned
order dated 23.06.2021 passed by the
respondent no.2-Additional Registrar
(Appeals) in Appeal No.23 of 2021 in Special
Civil Application No.9907 of 2021, impugned
order dated 23.06.2021 passed by the
respondent no.2-Additional Registrar
(Appeals) in Appeal No.24 of 2021 in Special
Civil Application No.9908 of 2021, impugned
order dated 23.06.2021 passed by the
respondent no.2-Additional Registrar
(Appeals) in Appeal No.25 of 2021 in Special
Civil Application No. 9909 of 2021 and
impugned order dated 23.06.2021 passed by the
respondent no.2-Additional Registrar
(Appeals) in Appeal No.22 of 2021 in Special
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Civil Application No.9910 of 2021 are quashed
and set aside. Rule is made absolute to the
aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J)
RAGHUNATH R NAIR
