Gujarat High Court
The Manjipura Milk Producer ... vs State Of Gujarat on 25 August, 2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11656 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
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Approved for Reporting Yes No
✔
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THE MANJIPURA MILK PRODUCER COOPERATIVE SOCIETY LTD.
Versus
STATE OF GUJARAT & ORS.
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Appearance:
CHIRAG A PARIKH(8237) for the Petitioner(s) No. 1
MR VC VAGHELA(1720) for the Petitioner(s) No. 1
MS MANISHA LAVKUMAR SHAH, ADDL. ADVOCATE GENERAL WITH MR
JAY TRIVEDI, AGP for the Respondent(s) No. 1,2,5
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CORAM:HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 25/08/2025
ORAL JUDGMENT
1. By way of this petition under Article
226 of the Constitution of India, the petitioner
has approached this Court with the following
reliefs.
"A. Your Lordships may be pleased to
admit and allow this petition;
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B. Your Lordships may be pleased to
issue a writ of mandamus or writ in
the nature of mandamus or any other
appropriate writ, order or direction
by quashing and setting aside the
audit classification certificate
issued by the respondent No.4 herein
dated 31.05.2025 at Annexure-A to this
petition;
C. Your Lordships may be pleased to
issue appropriate writ, order or
direction, directing the respondent
No.5 not to reject the nomination form
of the representative of the
petitioner society from contesting the
election of Kheda District Cooperative
Milk Producers Union Ltd. from Nadiad
Constituency for the election to be
held on 12.09.2025;x.18
D. Pending admission, hearing and
final disposal of this petition, be
pleased to stay the execution,
implementation and operation of the
audit classification certificate dated
31.05.2025 at Annexure-A to this
petition;
E. Be pleased to grant any other
relief/s as may deem fit proper, in
the interest of justice."
2. Brief facts, as per the petitioner,
giving rise to the present petition can be stated
as under.
2.1 The petitioner is a primary level milk
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producer cooperative society registered under the
provisions of the Gujarat Cooperative Societies
Act, 1961. The petitioner - society is registered
in 1966 and its registration number is 9782. It
is a primary level milk producing cooperative
society and is affiliated to the Kheda District
Cooperative Milk Producers Union Ltd. The
petitioner society has about 620 members. The
petitioner society has regularly supplied milk to
the District Milk Union and its accounts are
regularly audited and is receiving A-Audit
classification.
2.2 The Kheda District Cooperative Milk
Producers Union Ltd. is a specified society
registered under the provisions of the Act, 1961.
The election of the union is held as per the
Gujarat Specified Cooperative Societies Elections
to Committee Rules, 1982. It is a society as per
the provisions of section 74C of the Act. The
term of the union is five years. The last
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election of the union was held on 31st August,
2020 and its term is expiring on 31st August, 2025
and therefore, its election is to be completed on
or before 31st August, 2025.
2.3 It is the case of the petitioner that as
per Rule 3A of the Gujarat Specified Cooperative
Societies Elections to Committee Rules, 1982, the
voters list is to be prepared as per the position
prevailing on 31st March, 2025 and as per the
provisions of byelaw No.17.1.3, any
representative of a member society wants to
contest the election, such society should have
obtained audit classification 'A' or 'B' during
the last audit.
2.4 It is the case of the petitioner that
audit of all the previous years of the petitioner
society has been completed and the petitioner
society had obtained 'A' audit classification for
all these years. Even, the audit classification
from 01st April, 2023 to 31st March, 2025 was held
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on 21st April, 2025 and the petitioner society was
awarded 'A' audit classification.
2.5 The petitioner states that the
petitioner society received letter dated 12th May,
2025 from the office of the respondent No.3
stating that Shri Ankitkumar Patel and Shri
Rajendra S. Patel have asked for re-audit of the
society and therefore, the Chairman/Secretary was
asked to remain present before the respondent
No.3 on 16th May, 2025 with all the relevant
documents.
2.6 It is the case of the petitioner that
the petitioner remained present before the
respondent No.3 and cooperated in the
proceedings. Thereafter, the respondent No.3 by
order dated 26th May, 2025 appointed respondent
No.4 to carry out the re-audit of the society
between 28th May, 2025 and 31st May, 2025.
2.7 It is the case of the petitioner that
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re-audit was carried out and completed on 31 st
May, 2025 but, the classification certificate was
handed over to the petitioner on 08 th August,
2025. Therefore, the petitioner made an
application on 11th August, 2025 to supply the
copy of marksheet to the petitioner, which was
given to the petitioner on 12th August, 2025.
2.8 It is the case of the petitioner that in
the audit, certain defects were found and by
order dated 21st July, 2025, it was ordered to
initiate proceedings directly under Section 93 of
the Act.
2.9 It is the case of the petitioner that
preliminary voters list was published for
election of Kheda District Cooperative Milk
Producers Union Ltd. The Vice Chairman of the
petitioner raised objection against the name of
the petitioner and requested to delete the name
of the petitioner from the final voters list to
be published for Nadiad Block of the Union.
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2.10 It is the case of the petitioner that
the petitioner was issued notice and therefore,
the society appeared before the Election Officer
and filed its reply against the objection.
2.11 The Election Officer being satisfied,
rejected the objection and continued the name of
the petitioner society the final voters list
published on 12th August, 2025.
2.12 It is the case of the petitioner that
the election programme has been published on 12th
August, 2025 and as per the election programme,
the nominations are to be filed between 20 th
August, 2025 and 28th August, 2025. The scrutiny
of the nomination is to be held on 29th August,
2025 and the list of valid nomination is to be
published on 29th August, 2025. The last date for
withdrawal of the nomination is 30th August, 2025.
The list of final contesting candidates is to be
published on 30th August, 2025 at 1700 hours. The
election is to be held on 10th September, 2025 and
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the counting of votes to be held on 12th
September, 2025.
2.13 It is the case of the petitioner that in
the re-audit, certain queries have been raised
which are technical in nature and does not show
any substantial defects. It is further the case
of the petitioner that the guidelines are
provided about the manner and method applying the
audit criteria which can be awarded to any
society. As per the guidelines, the society
getting more than, out of total, 60 marks would
deserve class 'A', society getting marks between
50 and 59 is entitled for class 'B', society
getting marks between 40 and 49 is entitled for
class 'C' and the society getting marks below 40
would get class 'D'.
2.14 It is thus the case of the petitioner
that although all throughout the petitioner
society has been awarded classification Grade 'A'
and even for the period between 01st April, 2023
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and 31st March, 2025, after audit, the society was
awarded classification Grade 'A'. It is the
further case of the petitioner that however, only
with a view to see that the petitioner society
does not get qualify to participate in the
election, under the guise of re-audit, respondent
authorities have awarded classification Grade 'C'
to the petitioner society under the political
influence and with mala fide intention.
3. Being aggrieved by and dissatisfied with
the aforesaid, the petitioner has approached this
Court by way of this petition for the aforesaid
prayers.
4. Heard learned advocate Mr.V.C. Vaghela
for the petitioner and learned Additional
Advocate General Ms.Manisha Lavkumar Shah with
learned Assistant Government Pleader Mr.Jay
Trivedi for the respondent-State and its
authorities.
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5. With the consent of learned advocates
for the respective parties, the petition is taken
up for final hearing at the admission stage.
5.1 Rule, returnable forthwith. Learned
Assistant Government Pleader Mr.Jay Trivedi
waives service of notice of Rule on behalf of the
respondents.
6. Learned advocate for the petitioner,
while questioning the classification certificate,
has made following submissions.
6.1 Learned advocate, mainly emphasised on
the aspect of mala fide intention on the part of
the State authorities in awarding classification
certificate as Grade 'C' to the petitioner
society. Learned advocate submitted that the
present petitioner society from its inception
getting certification either 'A" or 'B'.
According to learned advocate, recently also for
the period from 01st April, 2023 to 31st March,
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2025, after the audit, society was awarded
category 'A' classification and thereafter
immediately, under the guise of provisions of
Section 84(5) of the Gujarat Co-operative
Societies Act, 1961, on an application by
Rajendra S. Patel and Ankitkumar Patel who are
the committee members of the society, proceedings
for re-audit sought to be initiated. After the
said re-audit, with mala fide intention, the
society was awarded Grade 'C' so as to see that
the petitioner society does not become qualify to
take part in the election of the Kheda District
Milk Producers' Union Ltd.
6.2 Learned advocate for the petitioner, to
substantiate the contents of mala fide intention,
submitted that after the re-audit got over,
certificate was not issued to the petitioner
society on the same day. However, the said
certificate was withheld for two months so that
the petitioner society may not get sufficient
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time to dispute and/or challenge the said
certificate. According to learned advocate, such
a design is executed by the State authorities
only under the political influence and with a
view to see that the petitioner society is kept
away from the election.
6.3 Learned advocate further submitted that
the certificate was only issued on 08 th August,
2025 i.e. after the date on which the election
was declared on 02nd August, 2025. According to
learned advocate, initiating proceedings under
the guise of Section 84(5) of the Act and
thereafter withholding the certificate for
unexplainable delay speaks volume about the mala
fide action on part of the respondent
authorities. Thus, learned advocate requested
this Court to allow the petition as prayed for.
6.4 According to learned advocate, as per
Rule 38B(2) of the Gujarat Cooperative Societies
Rules, 1965, it is the duty on part of the
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authority to award audit classification the
moment the audit is over. Learned advocate,
therefore, submitted that in the present case
although the audit was over somewhere on 31st May,
2025, however the certificate was issued only on
08th August, 2025 i.e. after delay of almost two
months. Thus, according to learned advocate,
therefore, the certificate issued at such a
belated stage is in violation of Rule 38B(2) of
the Rules, 1965 and thereby the same deserves to
be quashed and set aside.
6.5 To substantiate the aforesaid
contention, learned advocate relied on the
following judgments - (i) Election Commission of
India v. Ashok Kumar [(2000) 8 SCC 216], (ii)
Shrutbandhu H. Popat v. State of Gujarat [2007
(3) GLR 1942], (iii) Kalubhai Ranabhai Akabari v.
State of Gujarat [2007 (3) GLH 57], (iv) Ravi
Yashwant Bhoir v. District Collector, Raigad
[(2012) 4 SCC 407], (v) Varshaben Pramodkumar
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Kothari v. State of Gujarat being Special Civil
Application No.10951 of 2014 decided on 02nd
September, 2014 and (vi) Jodiya Kheralu Dudh
Utpadak Sahakari Mandli Ltd. v. State of Gujarat
[ 2020 (0) AIJEL-HC 242604].
6.6 By making above submissions, learned
advocate for the petitioner has requested this
Court to allow the petition as prayed for.
7. Per contra, learned Additional Advocate
General, while opposing the present petition, has
made following submissions.
7.1 Learned AAG, at the outset, has made two
preliminary objections. Firstly, it was submitted
by learned AAG that the present petition has been
filed by the Manjipura Milk Producer Cooperative
Society Limited through its Chairman Shri
Kaushikbhai Somabhai Parmar. Learned AAG
submitted that along with the memo of petition,
there is no resolution annexed by the society
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authorising the present petitioner to file the
present petition nor any pleading with regard to
said authorisation is made in the memo of
petition. Thus, the petition filed by the society
through its Chairman is without any authority and
thereby the same deserves to be dismissed. The
second preliminary objection raised by the
learned AAG is with regard to availability of
alternative remedy by way of Appeal under Section
155 of the Gujarat Cooperative Societies Act,
1961. Learned AAG, therefore, submitted that
since the petitioner has alternative efficacious
statutory remedy available, the present petition
under Article 226 of the Constitution of India
may not be entertained and accordingly, deserves
to be dismissed.
7.2 Learned AAG submitted that the main
prayer of the petitioner with regard to challenge
to audit classification certificate itself is not
tenable in eye of law inasmuch as, the said
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certificate is based on the audit report and the
same has not been challenged and/or disputed by
the petitioner. Learned AAG further submitted
that the petitioner has also not challenged the
order passed by the competent authority for re-
audit. Learned AAG further pointed out that as a
matter of fact the petitioner upon being served
notice under Section 84(5) of the Act, appeared
before the authority and as such not raised any
objection against the re-audit. She further
submitted that as such in the Rojkam, petitioner
along with seven other members of the society,
appeared and made signature whereby re-audit was
decided to be carried out. According to learned
AAG, now, at this stge, having appeared before
the authority in the proceedings under Section
84(5) of the Act and having not raised any
objection with regard to re-audit, at this stage,
without challenging the audit report, prayer with
regard to certificate classification based on
such audit cannot be allowed. She, therefore,
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requested this Court to dismiss the petition with
cost.
7.3 Learned AAG further submitted that so
far as delay in issuing the classification
certificate is concerned, it cannot be said to be
of any mala fide intention. Learned AAG further
submitted that during the said period, in all 916
societies were audited and thereby it took some
time to issue classification certificate.
According to learned AAG, even otherwise, as per
Rule 38B(2) of the Rules, 1965, there is no
statutory and/or mandatory time limit prescribed
within which the certificate to be issued once
the audit is over. Learned AAG further submitted
that merely because there was delay in issuing
certificate, it would not be viewed as any mala
fide intention on part of the authorities.
7.4 By making above submissions, learned AAG
requested this Court to dismiss the petition with
cost.
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8. Heard learned advocates appearing for
the respective parties. I have also gone through
the materials produced on record. No other and/or
further submissions have been canvassed by
learned advocates for the respective parties
except mentioned hereinabove.
9. Having considered the submissions of the
respective learned advocates, following facts
emerged from the available record.
(i) The present petition filed by the
society through its Chairman Shri Kaushikbhai
Parmar without any authority of law, nor any
pleading to that effect was made about any such
authority is granted by the society.
(ii) Learned advocate for the petitioner
admitted that he has alternative remedy under
Section 155 of the Act, 1961 though in the
petition it is averred that no alternative remedy
is available to the petitioner.
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(iii) The petitioner has not challenged the
audit report on the basis of which the petitioner
was awarded Grade 'C' certificate. The petitioner
has also not disputed and/or raised any objection
against re-audit under Section 84(5) of the Act.
(iv) From perusal of the Rojkam drawn during
the proceedings under Section 84(5) it appears
that petitioner has not made any submissions
against the order of re-audit. On the contrary,
petitioner and other seven members of the society
have made their signature as if they are inviting
re-audit.
10. Considering the submissions of learned
advocates for the respective parties and the
facts of the case, the question that falls for
consideration of this Court is whether
classification certificate issued by the
respondent authority can be said to be illegal on
the ground of delay and mala fides?
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11. To decide the aforesaid question, at the
outset, relevant Rule pertaining to
classification certificate deserves to be
considered.
"38B. Auditors to award audit
classification.- (1) The Registrar
may, from time to time, keeping in
view the efficiency of management,
financial position and such other
factors, prepare the guidelines for
determining the status of a society.
(2) Every auditor shall, after
competing the audit of a society
determine and award the audit
classification to the society in
accordance with the guidelines
prepared by the Registrar, from time
to time, under sub-rule (1)."
11.1 The aforesaid Rule empowers the
Registrar to prepare the guidelines for
determining the status of a society based on
society's efficiency of management, financial
position and such other factors. The auditor
qualified shall, after completing the audit of
the society, determine and award the audit
classification of the society in accordance with
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the guidelines so prepared by the Registrar.
12. Considering the said Rule, it appears
that the entire process of determining and
awarding of the audit classification to the
society is divided into two parts. In the first
part, it is the Registrar who has to prepare the
guidelines. The role of the Registrar is thereby
limited qua preparation of guidelines determining
the status of a society based on efficiency of
management, financial position and such other
factors which the Registrar deems it necessary.
In the second part, it is the qualified
empanelled auditor who carries out independent
audit of a society and thereafter comparing such
audit with the guidelines prepared by the
Registrar, auditor gives audit classification to
the society concerned. In the entire Rule, there
is no time specified for issuance of certificate
once the audit is complete. Accordingly, in
absence of any statutory prescribed time limit,
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it would not be possible for this Court to hold
that certificate, if issued after some delay, by
the auditor is beyond any limitation.
13. Keeping in mind the aforesaid legal
position, let us test the contention of the
petitioner with regard to mala fide intention
behind not issuing audit certificate immediately
and issued after around two months. As stated
hereinabove, in Rule 38B of the Rules, there is
no time prescribed for issuance of certificate
after completion of audit. In absence of any
prescribed time, to test the contention of mala
fide, one has to see the period of delay and
cause behind it. If the period of delay is
reasonable and rational, the intention with
regard to mala fide shall not be inferred. In my
view, for attributing mala fide, scrutiny of
action has to be in its threadbare. In the
present case, I have considered length of delay
and the cause of delay. It was necessitated
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because allegation was made that the certificate
was intentionally withheld for certain time so
that the petitioner may not get an opportunity to
challenge the same. Hence, on inquiry, this Court
found that during that period, in all, 916
societies were audited and while issuing audit
certification, the auditor has to compare the
audit of the society along with guidelines issued
by the Registrar for the purpose of awarding
marks. This Court believes that the said
procedure requires mindful work, rather adopting
casual approach by the auditor. In such
eventuality, in my view, if petitioner was
awarded audit certification after two months of
the audit which coincidentally overlapping with
the election process and petitioner getting less
time to challenge the same cannot be, per se,
said to be of any mala fide intention.
13.1 True it is that in the peculiar fact,
the petitioner got very less time to challenge
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the audit certification, but in that
circumstances, instead of approaching for
alternative remedy under Section 155, petitioner
could have challenged the certificate on the
ground of incorrect marking and/or want of proper
application of guidelines of the Registrar with
regard to marking system. In the present case,
petitioner has only challenged the certificate.
Neither the petitioner has challenged decision of
re-audit, nor disputed the actual process of re-
audit nor even disputed with regard to marking
system adopted by the authorities. Therefore, in
absence of any such foundational challenge, in my
considered opinion, straightway challenging the
certificate only on the ground of mala fide would
not be tenable in eye of law. I say so because,
the certificate is based on re-audit and
prescribed guidelines with regard to marking
method. Thus, unless there is a challenge either
against re-audit process or marking system, it is
not open for the petitioner to challenge the
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certificate only. This Court under Article 226 of
the Constitution of India, cannot go into the
aspect of classification certificate without
there being any concrete challenge to the audit
or re-audit process and/or application of marking
system based on the guidelines issued by the
Registrar.
14. In view of the aforesaid discussion,
prayer with regard to issuing writ or direction
upon the respondent No.5 for not to reject the
nomination of the petitioner society from
contesting the election of Kheda District
Cooperative Milk Producers Union Ltd. From Nadiad
constituency for the election to be held on 12th
September, 2025 pales into insignificance. To
file nomination form to contest the election, the
society must have either 'A' or 'B' class of
audit certificate. Admittedly, the petitioner
society has been awarded 'C' class audit
certificate by which the petitioner became
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unqualified for the purpose of contesting
election. Thus, this Court under Article 226 of
the Constitution of India, cannot direct the
authorities to accept the nomination form of the
petitioner. In other words, by way of writ
jurisdiction, no writ and/or direction can be
issued for to act which is otherwise not
permissible in the eye of law.
15. With regard to the decisions cited by
learned advocate for the petitioner, there cannot
be any dispute with regard to the ratio laid down
thereunder. However, the facts of the present
petition are materially different and thereby
those decisions, in my view, are of no help.
16. For the foregoing discussion, petition
deserves no consideration and is hereby rejected.
17. Before parting, this Court has found
that there is no time limit prescribed in the
Rule to issue audit certificate after the audit
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is over. Hence, it is desirable and if felt
appropriate by the State Government, to issue
Circular/Guidelines to all the empanelled
Auditors to issue certificate within a specified
time limit after the audit is complete. The said
necessity of prescribing time limit is desirable
so as to mitigate the scope of any mala fide
action either at the instance of Auditor and/or
of any authority. Issuance of guidelines with
regard to prescribing time limit by way of
Circular would be a step further to remove any
grey area in which any such mala fide design can
be created.
Let this decision be sent to the
Cooperative Minister and the Principal Secretary
for its necessary consideration.
(NIRAL R. MEHTA,J)
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