Kishorbhai Sitarambhai Patel vs State Of Gujarat
2023 Latest Caselaw 4277 Guj

     C/SCA/9598/2023                                       JUDGMENT DATED: 09/06/2023




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                 R/SPECIAL CIVIL APPLICATION NO. 9598 of 2023


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE NIKHIL S. KARIEL

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1     Whether Reporters of Local Papers may be allowed to see the No
      judgment ?

2     To be referred to the Reporter or not ?                           No

3     Whether their Lordships wish to see the fair copy of the judgment No
      ?

4     Whether this case involves a substantial question of law as to the No
      interpretation of the Constitution of India or any order made
      thereunder ?

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                       KISHORBHAI SITARAMBHAI PATEL
                                   Versus
                             STATE OF GUJARAT
========================================================
Appearance:
MR MASOOM K SHAH(6516) for the Petitioner(s) No. 1,2,3,4,5
DS AFF.NOT FILED (N) for the Respondent(s) No. 3,4,7
MS JYOTI BHATT ASSISTANT GOVERNMENT PLEADER for the Respondent(s)
No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2,5,6
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     CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL

                                   Date : 09/06/2023

                                  ORAL JUDGMENT

1. Learned Advocate Mr. Masoom Shah has submitted affidavit of service for respondents no. 3, 4 and 7. The same is taken on record.

C/SCA/9598/2023 JUDGMENT DATED: 09/06/2023

2. Rule. Learned Assistant Government Pleader Ms. Jyoti Bhatt waives service of rule on behalf of the respondent- State.

3. At the outset, learned Advocate Mr. Masoom Shah does not press prayer made at paragraph no. 9(B) of the present petition at this stage.

4. Heard learned Advocate Mr. Masoom Shah on behalf of the petitioner and learned Assistant Government Pleader Ms. Jyoti Bhatt on behalf of the respondent State. Withe consent of the learned Advocates for the parties, the petition is taken up for final disposal.

5. By way of this petition, the petitioner has challenged an order dated 30.05.2023 passed by the Deputy Secretary ( Appeal), Agriculture, Farmers Welfare and Co-operation Department whereby challenge of the petitioner against an interim order passed in Revision Application No. 129 of 2023 dated 26.04.2023 by the Additional Registrar (Appeal), Co-operative Societies, Gujarat State has been rejected.

6. Learned Advocate Mr. Shah on behalf of the petitioners who would submit that the petitioners herein are members of the managing committee of one Mudad Village Service Co-operative Society and whereas they are aggrieved by an order dated 21.04.2023 passed by the District Registrar, Co- operative Society, Surat whereby custodian has been appointed in exercise of power under Section 74D of Gujarat Co-operative Societies Act, 1961 ( hereinafter referred to as 'the Act').

7. It is submitted by learned Advocate that essentially the present petition is challenging an order passed by the Additional Registrar dated 24.05.2023 whereby the request of the petitioners to grant an interim relief in a revision application preferred against order dated 21.04.2023 has been

C/SCA/9598/2023 JUDGMENT DATED: 09/06/2023

rejected. The said order passed by the Additional Registrar (Appeals) has been confirmed by the Deputy Secretary ( Appeals) as noted hereinabove. It is submitted by learned Advocate at the outset that while prima facie it would appear that the interim order as sought for by the petitioners would be almost amounting to granting of final relief and whereas it is submitted by the learned Advocate that in the instant case the interim relief as sought for is required to be granted more particularly on account of the fact that the custodian appointed as per the impugned order has declared elections and whereas if the elections are permitted to take place then the petitioners would not be able to continue for their legally elected/ selected tenure which would otherwise come to an end on 30.10.2025.

8. Learned Advocate in this regard would at the outset rely upon a decision of the Hon'ble Apex Court in case of Deoraj vs. State of Maharashtra & Ors. reported in 2004(4) SCC 697 more particularly paragraph no. 12 thereof whereby the Hon'ble Apex Court had inter alia observed that in an extraordinary case, even if grant of interim relief would tantamount to grant of final relief then also such a relief could be granted more particularly in situations whereby non grant of interim relief would result in infructuating of the principal proceedings. Learned Advocate would submit that while the petitioners are not asking for any final relief an interim relief though appears to have the same effect as a final relief but as submitted hereinabove if the elections are not halted then by the time the main revision application preferred by the petitioners which is pending consideration of the Additional Registrar is decided, the elections would take place and new committee would take over charge which would result in revision application itself being infructuated.

9. Learned Advocate on merits as far as interim relief is concerned, would submit that exercise of power under Section 74D as has been

C/SCA/9598/2023 JUDGMENT DATED: 09/06/2023

explained by this Court in Special Civil Application No. 16496 of 2016 vide order dated 27.01.2017 confirmed vide order dated 22.11.2017 in Letters Patent Appeal No. 204 of 2017, could be in two exigences i.e. where a new committee of management is not elected before the expiry of the term of office of the members of the committee and secondly on the ground that members of the committee though having been elected not functioning within the period of three months.

9.1 Learned Advocate would submit that in the instant case, the respondent authorities, unfortunately, have tried to take disadvantage of demise of a member of the managing committee while exercising the powers under the said rule. Learned Advocate would submit that the managing committee which had been formed on 31.09.2020 consisted of 11 members who had been appointed for a period of 5 years and whereas of the said 11 members during the interregnum after 31.10.2020, 5 members had resigned. Learned Advocate would further state that remaining 6 members of the committee including the present petitioners had called for general meeting of the committee on 18.04.2023 and whereas at the time of giving of notice for the general body meeting, one member namely Mrs. Kanchanben Keshavbhai Patel was alive and whereas unfortunately the said member had expired on 28.03.2023.

10. Learned Advocate would submit that upon the said member expiring, the number of members in the Executive Committee/managing committee was reduced to 5 and whereas relying upon bye-law 36(5) of the bye-laws of Co-operative Society, the respondent no.3 had passed an order dated 21.04.2023 appointing a custodian under Section 74D on the ground that since the coram as required under bye-law 36(5) i.e of more than 50% would now not be available therefore there could be no any legally permissible meeting of the managing committee. Learned Advocate would submit that

C/SCA/9598/2023 JUDGMENT DATED: 09/06/2023

as such, the statute requires that the managing committee should not be functioning for a period of three months after election and whereas after being appointment on 31.10.2020, the committee had been functioning for almost two and half years. Learned Advocate would submit that except for the unfortunate demise of the member as referred to hereinabove, there was a coram as per the bye-laws itself and whereas it is submitted by learned Advocate that other than exercising the extraordinary powers of appointing a custodian who has now sought for conducting a fresh election, the respondent authorities could have resorted to any other remedy whereby they could have if they were of the opinion that there is no coram in the managing committee directed the committee to hold election/selection for the vacant 6 posts. Learned Advocate would submit that the powers available under Section 74D in the instant case having been exercised absolutely arbitrarily more particularly a death having been used to a disadvantage, the impugned order may not be permitted to continue any further by this Court more particularly till the final decision in the revision application which is pending before the Additional Registrar more particularly since if there is no interim relief granted then the revision application itself would be infructuated.

11. This application is vehemently opposed by learned AGP Ms. Bhatt for respondent- State. Learned AGP would submit that a perusal of order dated 21.04.2023 whereby custodian was appointed would reveal very cogent reasons having weighed with the Registrar, Surat. Learned Advocate would submit that while originally the managing committee consisted of 11 persons, upon resignation of 5 persons it was reduced to 6 persons and whereas upon demise of the member referred to hereinabove the strength of the managing committee was reduced to 5 persons. It is submitted by learned AGP that since the bye-laws of the society itself require coram to be more than 50%, after the resignation and the demise, the coram would

C/SCA/9598/2023 JUDGMENT DATED: 09/06/2023

never get fulfilled and whereas under such circumstances, the District Registrar was well justified in exercising powers under Section 74D. In any case learned AGP would submit that the matter is at large large before the Additional Registrar ( Appeals) and whereas except for issuing directions, if thought necessary, to the Additional Registrar to expedite hearing, this Court may not grant any interim relief in favour of the petitioners herein more particularly since according to learned AGP the same would be almost in the nature of granting final relief in favour of the petitioners. Learned AGP would also rely upon observations of learned Co-ordinate Bench of this Court in Special Civil Application No. 14948 of 2020 in support her submissions that the exercise of power under Section 74D on account of there being a lack of coram was a justified exercise. Thus submitting learned AGP would request this Court not to interfere at this Court.

12. Heard learned Advocates for the respective parties who have not submitted anything else.

13. At the outset it is required to be noted that this this Court is hearing the petition for the limited purpose of considering grant of interim relief and whereas this Court is mindful of the fact that any observations made by this Court on merits, may effect the rights and contentions of the parties at this stage before the Revisional Authority i.e. the Additional Registrar ( Appeal) in the Revision Application preferred by the petitioner.

14. Insofar as the aspect on merits is concerned, in the considered opinion of this Court, if the exercise of elections are continued to be permitted then it would result in a very awkward situation inasmuch as the petitioners who are presently members of the managing committee and who have questioned the exercise of powers by the District Registrar by preferring revision application, would be faced with the situation of the

C/SCA/9598/2023 JUDGMENT DATED: 09/06/2023

committee itself being dissolved on account of fresh election being called and a new committee being elected. The issue also has to be considered from a different perspective i.e. in case the Additional District Registrar ( Appeals) were to allow the revision application of the present petitioners, and in the interregnum if the elections were permitted to continue then a situation would arise where third party rights might get created or that the entire exercise of elections would be rendered an exercise in futility.

15. Having observed as above it would also be relevant to mention that while the general principle is that interim relief which is in the nature of granting final relief should normally not be granted by this Court in exercise of extraordinary jurisdiction but at the same time as observed by the Hon'ble Apex Court in case of Deoraj ( supra), there are situations where non grant of interim relief would tantamount to dismissal of the principal proceedings itself. In the considered opinion of this Court, the present is such a case more particularly for the reasons as stated hereinabove and whereas if interim relief were not granted in favour of the petitioners, the same would result possibly in infructuating the revision application itself.

16. Insofar as the merits of the issues are concerned, as submitted by learned Advocate for the petitioners, the exercise of powers under Section 74D has been succinctly explained by a learned Co-ordinate Bench of this Court in Special Civil Application No. 16496 of 2016 dated 27.01.2017 and whereas the same has been reiterated by the Hon'ble Division Bench in Appeal in Letters Patent Appeal No. 204 of 2017. Insofar as the present issue is concerned, the second part of Section 74D i.e. where the members of the committee though having been elected not functioning within a period of three months is what has been resorted to by the District Registrar in the considered opinion of this Court, the ambit of the said provision could never have been extended to a circumstance like the present. While it

C/SCA/9598/2023 JUDGMENT DATED: 09/06/2023

is true that 5 members had resigned, resulting in the managing committee reduced to six members but at the same time even the six members were also well within the coram as set out in bye-law 36(5) of the bye-laws of the society itself. The coram unfortunately, went below the required 50% only upon the demise of one of the members and whereas in the considered opinion of this Court, demise or death, which is one of the most inevitable and natural things, could not have been misused to such an extent that a managing committee of a functioning society, finds itself pushed aside and a custodian is appointed to manage the affairs of the society. In the considered opinion of this Court, prima facie, the power under Section 74, is for the purpose of ensuring that managing committees of society, function as per the requirement of the cooperative law and whereas after being elected the managing committee should forthwith start functioning. In the instant case, while it is not the findings of the Registrar that the society was not functioning rather the finding of the Registrar being that upon the demise of one member since there is no possibility of coram now being complete therefore, the society would not be able to function any further therefore the powers have been resorted to. In the considered, prima facie, opinion of this Court, such exercise of power is nothing but arbitrary. In the prima facie opinion of this Court, the Registrar may have been well within his bounce, to have directed the society under powers available to the Registrar under Section 160 or any such analogous provisions in the act itself for holding election to the post which have been rendered vacant on account of the demise or on account of the resignation of the member and whereas an artificially and/ or naturally created vacancy i.e on account of resignation or on account of death, ought not have rendered the society non functional resulting in exercise of powers under Section 74D.

17. Insofar as the decision relied upon by learned AGP in Special Civil Application No. 14948 of 2020 is concerned, the learned Co-ordinate was

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concerned with a case where majority of members of the managing committee had resigned resulting in there being a lack of coram. It also appears from the decision that the Registrar in the said case had waited for three months to be over before exercising the power in question. In the considered opinion of this Court, the distinguishing factor in the present case as against the case with which the learned Co-ordinate Bench was concerned was the fact of demise of a member. It also appears very clearly that the District Registrar had exercised the powers under Section 74D within less than 30 days of demise of the member in question.

18. Under such circumstances, more particularly, to ensure that the revision application preferred by the present petitioners is not infructuated, in the considered opinion of this Court, a limited relief is required to be granted more particularly by balancing the equities to ensure that while the revision application before the Additional Registrar is not infructuated at the same time there should not be a complete stay of the order of the Registrar. Hence the following directions are passed:

[1] The Additional Registrar (Appeals) where Revision Application No. 133 of 2023 preferred by the present petitioners, is pending shall decide the said application finally within an outer limit of 30 days, from the date of receipt of this order.

[2] The election programme as notified by the custodian of the respondent no.7 society whereby the preliminary voters list is to be published from 05.06.2023 and the result of the election to be declared on 22.06.2023 shall remain stayed till final decision in the revision application no. 133 of 2023.

         [3]     It is further clarified that in case if elections are required to be




        C/SCA/9598/2023                                  JUDGMENT DATED: 09/06/2023

held then a fresh notification shall be issued by the custodian.

[4] It is further clarified that the observations made herienabove are only for the purpose of deciding the present petition and whereas Additional Registrar or any other authorities where the present issue is required to be agitated shall not be influenced by the observation as above and whereas decision shall be taken independently in accordance with law and its own merits.

[5] It is clarified that this Court has not gone into any aspect of prayer 9(B) which is not pressed by the learned Advocate for the petitioner and it would be open for the petitioner to agitate the said issue as and when required if so advised.

19. With these observations and directions the present petition stands disposed of as partly allowed. Rule is made absolute to the aforesaid extent.

Direct service is permitted.

(NIKHIL S. KARIEL,J) NIRU