[Cites 29, Cited by 0]
Gujarat High Court
Manharbhai Amratbhai Patel vs Director (Sugar) on 8 May, 2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13401 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
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Approved for Reporting Yes No
✔
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MANHARBHAI AMRATBHAI PATEL & ORS.
Versus
DIRECTOR (SUGAR) & ORS.
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Appearance:
MR MASOOM K SHAH(6516) for the Petitioner(s) No. 1,2,3,4
NEHA M SHAH(9218) for the Petitioner(s) No. 1,2,3,4
MR GURSHARAN H VIRK, GOVERNMENT PLEADER WITH MS DHARITRI
PANCHOLI, ASST. GOVERNMENT PLEADER for the Respondent(s) No.
1,2,3
MR BAIJU JOSHI(1207) for the Respondent(s) No. 4
MR. DHRUV D CHALIYAWALA(14081) for the Respondent(s) No. 4
NOTICE SERVED BY DS for the Respondent(s) No. 1,2,3
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CORAM:HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 08/05/2026
JUDGMENT
1. RULE returnable forthwith. Learned Assistant Government
Pleader Ms. Dharitri Pancholi, waives service of notice of Rule for and
on behalf of the respondent Nos.1, 2 and 3 and learned counsel Mr.
Baiju Joshi, waives service of notice of Rule for and on behalf of the
respondent No.4.
2. With the consent of the learned counsels for the parties, the
matter is taken up for final hearing and disposal.
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3. By way of present petition under Article 226 & 227 of the
Constitution of India read with the provisions of the Gujarat
Cooperative Societies Act, 1961 (hereinafter be referred to as "the
Act"), petitioners have prayed for the following reliefs :
"9A. Be pleased to quash and set aside notification/order bearing No. PWR-
1084-2010-K(1) dated 02.09.1985 issued by Respondent no. 3 - State of
Gujarat and all consequential actions taken by the Respondent no. 1
against the Petitioners under the section 93 of the Gujarat Co-operative
Societies Act, 1961; (Annexure-A)
B. Pending admission, hearing, and final disposal of this Petition and be
pleased to direct the respondents to maintain status quo as regards the
proceedings initiated against the Petitioners;
C. Pending admission, hearing, and final disposal of this Petition and be
pleased to stay the operation, implementation and effect of Chargesheet
dated 26.08.2025 issued by Ld. District Registrar, Bharuch under Section 93
of the Gujarat Co-operative Societies Act, 1961; (Annexure-I)
D. Be pleased to grant ad-interim relief in terms of Paragraph No.9(B)
and/or 9(C) of this Petition.
E. Costs of this Petition be awarded.
F. Such further and other relief, order or direction which may be just, fit,
proper and equitable in the facts and circumstances of the Petition."
4. Brief facts giving rise to the present petition are that, the
petitioners herein are members of the Shree Kantha Vibhag Sahkari
Mandli Ltd. engaged in manufacturing of Sugar and its bye-products.
That, the respondent No.4 issued a Notification/order No PWR-1084-
2010-K(1) under Section 3(3) of the Act granting powers to Director of
Sugar, Gujarat State all powers of Registrar under the Act. That, the
respondent No. 3 superseded all the previous notification/orders
under Section 3(3) of the Act. That, the respondent No.1 (Director
(Sugar) issued a show cause notice upon the petitioners and other
directors, as to why the proceedings under Section 93 of the Act
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should not be initiated against them for acting against the bye-laws of
the society. That, the respondent No. 1 (Director (Sugar) passed an
order under Section 93 of the Act appointing the respondent No.2 to
initiate inquiry/investigation against the petitioners. That thereafter,
the petitioners filed a Revision Application No. 33 of 2025 before the
Joint Secretary, Co-operative Societies (Krushi and Sahkar vibhag),
Gandhinagar. In the meantime, the Regular Post became vacant on
30.08.2025 and the charge was given to one another Secretary. That,
the respondent No.2 issued a notice upon the petitioners directing the
petitioners to file an appropriate oral or written representation on
20.05.2025. That, adjournments were sought by the petitioners as the
Revision Application was pending adjudication. That, an application
was filed before the respondent No. 1 (Director (Sugar) raising issues
of bias qua the respondent No. 2 (District Registrar). That, since the
Revision Application filed by the petitioners was pending adjudication,
the petitioners filed an application before the Joint Secretary, Co-
operative Societies, Gandhinagar requesting to pass necessary orders
for the early disposal of their Revision Application. That, the
petitioners notarized an affidavit stating the suspicious behaviour of
the respondent No.2, as they orally informed that no orders will be
passed in the Revision Application. That, this Court passed an order in
the Special Civil Application No. 8875 of 2025 and Special Civil
Application No. 9351 of 2025 dismissing the same. That thereafter,
the Chargesheet came to be issued. That, the Division Bench of this
Court rejected the Letters Patent Appeal No. 1059 of 2025 against the
judgement dated 29.07.2025 passed by the learned Single Judge.
5. Being aggrieved by and dissatisfied with the inaction on the
part of the respondent No.2, the present petition is preferred.
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6. Heard Mr. Masoom K. Shah, learned counsel appearing on
behalf of the petitioners, Mr. G.H. Virk, learned Government Pleader
assisted by Ms. Dharitri Pancholi, learned Assistant Government
Pleader appearing on behalf of the respondent Nos.1, 2 and 3 and
learned counsel Mr. Baiju Joshi, appearing on behalf of the respondent
No.4.
7. Learned counsel Mr. Masoom Shah has submitted that the
respondent No.1 - Director (Sugar) was granted all the powers of the
Registrar under the Act by virtue of the notification dated 12.09.1985,
which was superseded by virtue of the notification dated 21.07.2011,
however, the action was taken against the petitioners in 2025 based
on the 1985 notification and therefore, the respondent No.1 has no
powers to act after the supersession of 2011 notification and thus, the
impugned notification is illegal, erroneous and bad in law. The main
thirst of argument of learned counsel Mr. Shah is that the impugned
notification under challenge dated 12.09.1985, whereby, the
respondent No.1 - Director (Sugar) was vested with the powers of
Registrar under the Act with the aid of Section 3(3) of the Act is
absolutely illegal, erroneous and bad in law. He has submitted that
the respondent No.1 is not an authority prescribed under the statute
and therefore, delegation of powers under Section 3(3) of the Act to
respondent No.1 is absolutely illegal and against the settled principles
of law and therefore, the impugned action of the respondent No.1
deserves to be quashed and set aside as the notification of 1985 was
superseded by the subsequent notification of 2011, meaning thereby,
that the earlier notification of 1985 is by all means superseded and
therefore, the respondent No.1 cannot be vested with the powers of a
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Registrar under the Act. He has submitted that the quasi-judicial
power under Section 93 of the Act can be delegated by the Registrar
if at all and therefore, by virtue of the notification the respondent
No.1 cannot exercise jurisdiction under Section 93 of the Act as it is
the last will o the legislature and hence, Section 3 of the Act is even
otherwise not attracted and therefore, the impugned notification
and/or order delegating all the powers of the Registrar, which includes
powers under Section 93 is illegal, erroneous and bad in law. He has
submitted that the scheme of Section 93 of the Act specifically uses
the word Registrar or any person authorized by him to act under the
said provisions and thus, the simple interpretation of the language of
Section 93 would indicate that the respondent No.1 cannot be termed
to be a Registrar and he is not authorized to take any cognizance
under Section 93 and even he cannot be authorized by the Registrar.
7.1 In support of his submissions, learned counsel Mr. Shah has
referred and relied upon the decision rendered in case of Bhimandas
Ambwani (Dead) Through LRS. vs. Delhi Power Company
Limited, reported in [2013] 14 SCC 195, more particularly, the
observations made in para-9, which s reproduced hereunder :
"9. There cannot be any dispute to the settled legal proposition that
successive Notifications under Section 4 or successive Declarations under
Section 6 of the Act can be made, however, the effect of the same would be
that earlier notification/declaration stands obliterated/ superseded and in
such a fact-situation, it would not be permissible for either of the parties to
make any reference to the said notifications/ declarations which stood
superseded."
7.2 Learned counsel Mr. Shah has also referred and relied upon the
following decisions :
[I] Bharat Sanchar Nigam Limited vs. Telecom Regulatory Authority of
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India & Ors., [2014] 3 SCC 222;
[II] Mukesh V. Chavda & Ors. vs. State of Gujarat, [2013] GLH (3) 4;
[III] Union of India vs. Diljeet Singh & Anr., [1992] 2 SCC 672;
[IV] State of Orissa & Ors. vs. Titaghur Paper Mills, [1985] (Supp.) SCC
280;
[V] (The) Anant Mills Co. Ltd. (under Liquidation) vs. Municipal
Corporation of Ahmedabad, [1969] SCC OnLine Guj 1;
[VI] Gunvatray Manilal Desai vs. The Director of Agriculture Marketing
and Finance, Gujarat State, Ahmedabad, [1978] SCC OnLine Guj 15;
and
[VII] Commercial Tax Officer, Rajasthatn vs. Binani Cements, [2014] 8
SCC 319
7.3 In view of above referred submissions and the decisions,
learned counsel Mr. Shah has urged that the present petition be
allowed.
8. On the other hand, Mr. Virk, learned Government Pleader,
appearing on behalf of the respondent No.1 has objected the present
petition and submitted that the entire petition is misconceived a it is
premised on the fact that the notification dated 21.07.2011
supersedes the notification dated 02.09.1985, however, in fact, the
notification dated 21.07.2011 has no connection with the powers
conferred to the respondent No.1 - Director (Sugar) under the
notification dated 02.09.1985. Referring to the affidavit-in-reply filed
on behalf of the respondent No.1 to controvert the submissions of the
learnd counsel for the petitioner, learned Government Pleader Mr. Virk
has submitted that the post of respondent No.1 was created vide
Government Resolution dated 20.12.1982 and at that relevant point
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of time, when the Sugar Factories were to be licensed for the first
time or for expansion, the issue relating to distribution of molasses
were directly dealt with in both the Industries Department and in the
Prohibition and Excise Department and thus, due to various
departments being involved, in order to enable the departments to
take the decision expeditiously relating to the license for distribution
etc., under the demand of Gujarat State Federation of Sugar Co-
operatives, the impugned notification of 1985 was issued and the
respondent No.1 was given the powers of a Registrar. He has
submitted that in clause-7 of the said G.R. dated 20.12.1982, it is
stipulated that the Directorate of Sugar shall be designated as
Additional Registrar of Co-operative Society and he should perform all
the powers of the Registrar of Co-operative Societies. He has
submitted that pursuant to the said Government Resolution dated
20.12.1982, a subsequent Government Resolution came to be passed
on 27.04.1984 by the Co-operation Department, Government of
Gujarat whereby, the Director of Sugar, Gujarat State, Gandhinagar,
was declared as the Head of the Department and Administrative and
Financial Powers of the Head of the Department were delegated to
him. He has submitted that subsequently, on 02.09.1985 by
exercising the powers under Section 3(3) of the Act, the Directorate of
Sugar was conferred all powers of the Registrar under the Act. He has
submitted that vide Notification dated 21.07.2011, the Government of
Gujarat conferred powers upon the officers while superseding all the
notification issued in this behalf. He has submitted that the contention
of the petitioner is that, upon the issuance of the said Notification
dated 21.07.2011, the earlier notifications, specifically Notification
dated 02.09.1985, has been superseded and therefore, the
respondent No. 1 has no power and/or authority to issue the notice
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under Section 93 of the Act. Apropos the said contention of the
petitioners, he has submitted that the issuance of the Notification
dated 21.07.2011 was for the purpose of granting powers of the
Registrar to its sub-ordinate authorities and it is in that context, the
words, "In supersession of all the notifications issued in this behalf
mentioned in Notification dated 21.07.2011 are required to be
interpreted and only the notifications which were connected with the
issue of conferment of powers of the Registrar to its Sub-ordinate
Officers were superseded by way of the Notification dated
21.07.2011" and therefore, the issuance of the Notification dated
21.07.2011 is in consequential to the powers of Director Of Sugar,
which has been granted since 1985. He has submitted that the noting
of the passing of Notification dated 21.07.2011 specifies that the
Notification dated 01.12.2005 of the Co-operation Department was
superseded by issuing the Notification dated 21.07.2011 and thus, the
Notification dated 01.12.2005 did not confer powers to different
caders of the officers, specifically with respect to the Housing Co-
operative Societies and therefore, a subsequent Notification was
needed and the said Notification dated 01.12.2005 was superseded
vide Notification dated 21.07.2011. So far as the notice issued under
Section 93 of the Act is concerned, learned Government Pleader Mr.
Virk has submitted that now it is already decided by the Co-ordinate
Bench of this Court and confirmed by the division Bench and
therefore, present petition cannot be entertained.
9. At the outset, it may be noted that the respondent No.4 came
to be impleaded as party respondent No.4 to the present proceedings
vide order dated 23.02.2026, who is represented through learned
counsel Mr. Baiju Joshi.
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10. Learned counsel Mr. Joshi has objected the present petition and
submitted that there was a large scale misappropriation of funds of
more than Rs. 34 Crores and the present petitioners are the members
of the of the managing committee of the respondent No.4 Society and
they are facing serious charges, for which, the respondent No.1 has
issued show cause notice dated 23.04.2024 holding inquiry under
Section 93 of the Act and appointed District Registrar, Bharuch as the
Inquiry Officer for initiating inquiry against the present petitioners. He
has submitted that against the said order, some of the members have
approached the revisional authority by way of filing Revision
Application No.33 of 2025 before the Joint Secretary, Co-operative
Societies, Gandhinagar under Section 155 of the Act, wherein no order
was granted in favour of the petitioners. He has further submitted that
the impugned notice under challenge (at Annexure-D) was issued
against all the members of the Managing Society and some of the
members of the Managing Society approached this Court by way of
preferring Special Civil Application Nos. 8875 of 2025 & 9351 of 2025,
which came to be dismissed vide order dated 29.07.2025 and against
the order of the learned Single Judge, Letters Patent Appeal Nos. 1055
of 2025 & 1059 of of 2025 were preferred, which also came to be
dismissed by the Division Bench of this Court vide order dated
09.09.2025 and therefore, under such circumstances, under the guise
of challenging the notification of 1985, the petitioners have come out
with the present petition with an intention to subvert the order passed
by the Co-ordinate Bench and confirmed by the Division Bench. He
has submitted that the Division Bench has now clarified the aspect in
respect to powers exercised by the respondent No.1 and observed
that "while saying so, leaving it open for the authorized officer to
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conduct inquiry in accordance with Section 93 of the Act .......",
therefore, now this petition cannot be entertained on the ground of
challenging the notification of 1985 by way of filing the present
petition. He has submitted that the Co-ordinate Bench of this Court
has upheld the order of inquiry under Section 93 of the Act and
dismissed the petition preferred by the members of the Managing
Committee, which was confirmed by the Division Bench in Letters
Patent Appeals as aforesaid and also directed the concerned officer to
proceed with the proceedings under Section 93 of the Act and
therefore, it is not open for this Court to go into the merits of the
matter under the garb of present petition challenging the notification
of 1985 almost after 40 years and thus, the same is required to be
considered in light of the order passed by the Co-ordinate Bench and
confirmed by the Division Bench.
11. Pursuant to the affidavit-in-reply filed on behalf of the
respondent No.1, petitioners have filed their Affidavit-in-rejoinder and
referring to the same, learned counsel Mr. Masoom Shah, appearing
for the petitioners, has submitted that the impugned actions and
omissions on the part of the respondents are arbitrary, unreasonable,
and dehors the settled principles of law, thereby resulting in a gross
violation of the fundamental rights guaranteed to the petitioners
under Articles 14, 19, and 21 of the Constitution of India. He has
submitted that the respondent No.1 has placed reference to the
notification dated 20.12.1982, when the post of Director of Sugar was
created, which was produced across the bar by the petitioners at the
time of hearing, which was valid only up to 1983 and no further
extensions are produced on record, so it is to be presumed that the
notification has lapsed, and hence also, the post of Director of Sugar
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does not survive in the eyes of law, which also explains why the State
of Gujarat created the position of Director of Sugar and, in essence,
clearly establishes the petitioner's case. He has submitted that the
respondent has produced the 1984 resolution on record, which clearly
establishes that the Director of Sugar is the Head of the Department,
which is not an authority created under the Co-operative Societies Act
and hence, the delegation is contrary to the parent act and its
provisions. He has submitted that the respondents' stance in their
reply is that, the 2011 notification was intended to confer the
Registrar's powers on its subordinate authorities and for that purpose,
various words in the Notification require interpretation and in that
context, the impugned Notification could not have delegated the
Registrar's power to the Director of Sugar, who is the Head of the
Department and an independently created authority by the State. He
has submitted that the Notifications which were connected with the
issue of conferment of power of the REgistrar to its subordinate
officers were superseded by way of the Notification dated 21.7.2011
and if that is the case, the impugned Notification could not have
delegated the Registrar's power to the Director of Sugar and thus, any
notification or order publicly made in exercise of a statutory authority
cannot be construed in the light of explanations given subsequently
and hence, the affidavits cannot provide an explanation for the
Notification subsequent to its issuance, which is impermissible in the
eyes of the law, and must be construed objectively with reference to
the language used in the Notification itself and hence, fresh reasons
in the shape of an affidavit are impermissible. He has submitted that
the alleged note pertaining to the issuance of the Notification dated
21.07.2011 has not been produced on record and in the absence of
such noting, a serious doubt arises as to its existence. He has
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submitted that there is a reference to a 2005 Notification that was
supposed to be superseded, but no such Notification has also been
produced on record and even if that is the situation and such a
notification of 2005 does exist, or such a note does exist, the words in
the 2011 Notification are crystal clear that all the Notifications stand
superseded and hence, any Notification issued prior to 2011 would
definitely be superseded and therefore, learned counsel Mr. Shah has
urged that the present petition be allowed.
12. I have heard the learned counsel appearing for the respective
parties and perused the material placed on record. After considering
the submissions canvassed by both the sides and after considering
the facts of the case, the issue raised by the learned counsel Mr.
Masoom Shah, for the petitioners is now merely an academic
whatsoever it may be, since the Co-ordinate Bench of this Court has
dwelled into the very notice issued under Section 93 of the Act and
the said subject is already decided by the Co-ordinate Bench by
observing that the action of the respondent in consonance with the
settled principles of law and dismissed the petition preferred by some
of the members of the managing committee and the said decision of
the Co-ordinate Bench was upheld by the Division Bench. Now even
looking to the propriety and precedent, if one Court has already
decided the issue relating to the powers and the issuance of notice
under Section 93 of the Act by the respondent authority and
concluded by that Court, this Court is of the opinion that it is not open
for this Court to dwell into the issue relating to the notification
challenged by the petitioner under the guise of indirectly challenging
the action of the respondent authority under Section 93 of the Act in
the present petition once it is concluded in respect of the other
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committee members.
13. At this juncture, it would be appropriate to refer to the order
dated 29.07.2025 passed by the Co-ordinate Bench of this Court in
Special Civil Application Nos. 8875 of 2025 & 9351 of 2025, whereby,
referring to the provisions of Section 93 of the Act, the Co-ordinate
Bench has observed as under :
"11. Having heard the learned advocates appearing for the respective
parties and having gone through the material produced on record, a short
but interesting question that falls for consideration of this Court is, whether
the Registrar / Director (Sugar), Gujarat State, is permitted to hold any kind
of inquiry before initiating proceedings under Section 93 of the Act and/or
can the Registrar / Director (sugar), Gujarat State be permitted to call upon
the concerned person / delinquent at the stage of appointing and/or
authorizing officer to hold inquiry under Section 93 of the Act?
12. So as to decide the aforesaid question, first and foremost thing is to
go through the provision of Section 93 of the Act very carefully. Section 93
of the Act reads, thus;
"93. Power of Registrar to assess damages against
delinquent, promoters, etc.:
(1) Where, in the course of or as a result of an audit under
Section 84, or an inquiry under Section 86 or an inspection under
Section 87, or the winding up of a society, the Registrar may
satisfied on the basis of the report made by the auditor or the
person authorised to make inquiry under Section 86, or the person
authorised to inspect the books under Section 87, or the Liquidator
under Section 110, that any person who has taken any part, in the
organisation or management of the society or any deceased, or past
or present officer of the society has, within a period of five years
prior to the date of such audit, inquiry, inspection or order for
winding up, misapplied or retained, or become liable or accountable
for, any money or property of the society, or has been guilty of
misfeasance or breach of trust in relation to the society, the
Registrar or a person authorised by him in that behalf may
investigate the conduct of such person or persons and after framing
charges against such person or persons, and after giving a
reasonable opportunity to the person concerned and in the case of a
deceased person to him representative who inherits his estate, to
answer the charges, make an order requiring him to repay or restore
the money or property or any part thereof, with interest at such rate
as the Registrar or the person authorised under this section may
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determine, or to contribute such sum to the assets of the society by
way of compensation in regard to the misapplication, retention,
misfeasance or breach of trust, as he may determine.
(2) The Registrar or the person authorised under sub- section (1)
in making any order under this section, may provide therein for the
payment of the costs or any part thereof of such investigation, as he
thinks just, and he may direct that such costs or any part thereof
shall be recovered from the person against whom the order has
been issued.
(3) This section shall apply, notwithstanding that the act is one
for which the person concerned may be criminally responsible".
13. For the purpose of deciding the aforesaid question, the provision of
Section 93(1) is the most relevant. Thus, upon careful consideration of the
provision of Section 93(1), it appears that the said provision is legislated to
invest power in the Registrar / Director (Sugar) so as to assess damages
against the delinquent, promoters etc. upon being satisfied on the basis of
an audit under Section 84, inspection under Section 84(a), inquiry under
Section 86, inspection under Section 87 or 88 or winding up of the society.
It has also provided limitation of 5 years prior to any such audit, inquiry and
inspection etc. can be gone into in the inquiry under Section 93. As per the
said provision, the discretion is also given to the Registrar / Director (Sugar)
to authorize any officer to undertake inquiry under Section 93 instead of
conducting inquiry by itself. Thereafter, once the actual inquiry is initiated,
the stage of issuing show cause notice would come upon the concerned
delinquent for the purpose of framing of charge by giving reasonable
opportunity. Lastly, the stage of determination would arise wherein order of
repay, restore the money or the property with interest can be passed.
14. From the above analysis of the provisions of Section 93(1) of the
Act, this Court finds clear dichotomy within the provisions as to
administrative function and quasi-judicial function. Thus, the provisions of
Section 93(1) of the Act envisages two separate parts. With regard to
holding of inquiry under Section 93(1) of the Act, at the first stage, the
Registrar / Director (Sugar) has an option either to inquire itself or to
authorize a person to hold an inquiry. This decision is purely an
administrative decision, for which, in the provisions of the Act, there is no
requirement of issuance of any notice, as envisaged. The legislature has in
its wisdom not provided any such provisions in the nature of pre-inquiry for
the simple reason which I could see is that by virtue of said decision as
such there is no prejudice to any delinquent. Once the decision to hold
inquiry under Section 93 of the Act either by the Registrar / Director (Sugar)
itself or by the person so authorized is taken, the function of the authority
would then start as that of quasi-judicial authority. I say so because in the
later part of the provisions of Section 93(1) of the Act, the authority
undertaking inquiry is obliged to frame charges, obliged to give reasonable
opportunity to the person concerned and thereafter, can pass an order
requiring the said person or delinquent to repay or restore the money or
property to any part thereof with interest.
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15. In view of the aforesaid, this Court has completely failed to
understand as to how and why the Director (Sugar) has thought it fit to
hold pre-inquiry by show cause notice dated 1.1.2025. According to this
Court, as stated herein-above, such issuance of show cause notice at the
stage of whether to initiate proceedings or authorize any person to hold
inquiry under Section 93, is completely foreign to the provision of Section
93(1). The Director (Sugar) appears to be completely ignorant about the
simple language of the provision of Section 93(1). Calling upon the person
and/or delinquent at this stage is unwarranted and adjudicating
submissions of the person and/or delinquent by way of show cause notice
would amounting to pre-judge of issue before actually holding inquiry under
Section 93(1). Another angle of the situation would be the inquiry which has
been held, although, has no force in the eye of law; however, the
subsequent inquiry that suppose to be undertaken by the authorized
person which is backed up of provision of Section 93(1), would become
mere formality. I say so because once the show cause notice is issued to
the concerned person, naturally in response thereof, the person and/or
delinquent would raise all his best contentions as to why any such inquiry
shall not be initiated against him. Thereafter, if the Registrar/ Director
(Sugar) initiates inquiry and/or authorize someone to hold inquiry, in that
event, all the contents of the delinquent would be repeated which would
amount to lead meaningless and/or futile exercise. In the instant case,
consequent situation may arise that the officer so authorized to undertake
inquiry, who is subordinate to the Registrar / Director (Sugar), Gujarat
State, would not be able to take independent view than that of already
taken by the Registrar / Director (Sugar) while taking decision with regard
to authorizing person to hold inquiry. Therefore, now, the inquiry that would
be initiated by the authorized person would be mere empty formality, as
best of the contentions raised by the delinquent have already been pre-
judged by the Registrar / Director (Sugar), Gujarat State vide impugned
order.
16. In my view, the action on part of the Registrar / Director (Sugar),
Gujarat State of calling the person against whom inquiry is to be proposed
under Section 93 at the stage of taking decision of institution of inquiry
and/or authorizing person to hold the inquiry, is not backed by the provision
of law. The action on part of respondent No.1 appears to be very clear that
respondent No.1 wants to keep the supremacy over the proceedings and at
the same time, does not want to shoulder the responsibility of taking
decision under Section 93. It is not proper on part of respondent No.1 to
authorize a person to hold inquiry after pre-judging the issue by which the
independence of the subordinate officer, in my view, is completely taken
over by the respondent No.1. The said action is completely contrary to the
concept and object of Section 93 of the Act and thereby, such action at the
end of respondent No.1 is not worthy approving but has to be deprecated.
Section 93(1) of the Act does not contemplate any pre-inquiry stage and
thereby, the respondent No.1 ought not to have issued notice and called
upon the delinquent, as the same, in my view, is completely against the
basic structure of the provision of law. Thus, even if any such practice is in
force since many years, but has no legal force, is unjust, illegal,
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unwarranted and de-hors the law, thereby such practice has to be
discontinued with immediate effect. The State authorities cannot adopt any
procedure or practice which is not legislated in the provision of law.
17. Keeping in mind the aforesaid discussion, now, this Court would like
to proceed to deal with the contentions raised by learned advocates for the
respective parties, as under :
(1) To begin with, let us examine the contentions of an alternative
statutory remedy as envisaged under Section 150(9) read with Section
153(3) of the Act, which read, thus:
"150. Gujarat State Co-operative Tribunal.
(1) xxx xxx xxx
(2) xxx xxx xxx
(3) xxx xxx xxx
(4) xxx xxx xxx
(5) xxx xxx xxx
(6) xxx xxx xxx
(7) xxx xxx xxx
(8) xxx xxx xxx
(9) The Tribunal may call for and examine the record of any
proceeding in which an appeal lies to it, for the purpose of satisfying
itself as to the legality or propriety of any decision or order passed.
If in any case, it appears to the Tribunal that any such decision or
order should be modified annulled or reversed, the Tribunal may
pass such order thereon as it may deem just."
"153 Appeals.
(1) xxx xxx xxx
(2) xxx xxx xxx
(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."
On careful consideration of the aforesaid provision of law, it appears
that the remedy by way of an appeal is provided before the Gujarat State
Cooperative Tribunal against any decision or order passed under Sections
82, 90 and 93. Meaning thereby, an Appeal appears to have been
prescribed against the order or decision in the inquiry under Section 93.
This Court is of the firm opinion that any decision or order which is final in
nature, can be appealable by way of Appeal before the Tribunal. As
discussed herein-above, Section 93 has two parts, viz., (i) on
administrative side which includes the decision to initiate inquiry and/or to
authorize a person to hold inquiry and (ii) a quasi-judicial category wherein
framing of charge, giving opportunity of hearing and passing of a decision
would be undertaken. Therefore, what is prescribed under Section 150(9)
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read with Section 153(3) of the Act is an Appeal against the final outcome,
which is affecting the rights of the parities. Mere decision to hold inquiry or
cause to be held by the authorized person, is not an adversarial order which
affects any rights of the person and/or delinquent. As discussed herein-
above, in the present case, what is impugned is the order authorizing a
person to hold an inquiry under Section 93, being an administrative in
nature, in my view, the remedy of Appeal is not available under Section
150(9) read with Section 153(3) of the Act.
(2) So far as the contention raised by the petitioners that the Registrar /
Director (Sugar) must record the decision considering the merit as well as
the submissions those were raised by the petitioners pursuant to the show
cause notice is concerned, in my view, the said contention is not worth
accepting. As observed herein-above, issuance of show cause notice by the
respondent No.1 itself is illegal. Thereby, at the administrative stage, no in-
depth satisfaction to be recorded for forming decision to contemplate
inquiry and/or authorizing person to hold an inquiry. One more reason, for
not accepting the said contention, is that if the respondent No.1 records
the satisfaction after considering the submissions of the petitioner, in that
event, it would amounting to pre-judging the matter which would result into
rendering actual inquiry under Section 93 of the Act as an empty formality.
Be that as it may. From the impugned communication and / or the order, it
cannot be said that there is no satisfaction recorded by the respondent
No.1. Respondent No.1, in my view, said to have recorded its prima facie
satisfaction about alleged irregularities and / or misconduct. In the said
order, it is specifically stated that respondent No.1 has considered report
under Section 86 of the Act and findings recorded in the said report.
Accordingly, in my view, while passing the order, which is in administrative
nature, no in-depth recording is necessary, hence, the contention of the
learned advocate for the petitioners is rejected.
(3) So far as the contention raised by the petitioners with regard to
limitation and method of pick and choose policy is concerned, in my view,
the same being purely on merits and thereby, same can very well be gone
into by the authorized officer while holding inquiry under Section 93 of the
Act. However, at this stage, it is to be noted that merely because the period
of inquiry is prescribed from 2012 to 2024, certain years are beyond 5
years before the inquiry report would per se not vitiate holding of inquiry.
The authorized officer can appreciate the said contention and decide the
same in accordance with law. So far as contention with regard to pick and
choose action is concerned, in my view, there cannot be any negative
equality. Merely because one Mukesh Patel, who was also a Director, during
the said period, has not been served with the notice that itself would not be
a ground for the petitioner to claim an equal treatment. I say so because it
is settled law that there cannot negative equality. The petitioners cannot
claim the same treatment which has been given to Mr.Mukesh Patel. Non
service of notice upon Mr.Mukesh Patel, even if his name is figured in the
report under Section 86, cannot be said to be legal and thus, there cannot
be any equality in illegality.
(4) So far as the contention with regard to either wait for final outcome
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of SCA No.6165 of 2025 or this petition be heard along with SCA No.6165 of
2025 is concerned, in my view, the same is not acceptable for the simple
reason that both the petitions are independently filed and by the
independent parties in a different capacity. More so, in the present case,
only question of law is being decided, rather going much into the facts of
the case. Thus, while deciding a petition on question of law, if another
petition which is pending, may not always be heard together, if there is no
intra connecting facts and/or overlapping facts or in conflict of interest
between the parties. So, whatever decided in this petition may be made
applicable to the other petition if the facts of that petition, are not
materially different. Thus, in my view, said contention raised by the
petitioners is not acceptable. Even otherwise, said contention raised by the
petitioners is not pleaded in the memo of petition but, the same is raised as
an afterthought sensing the fate of this petition after putting marathon
efforts while arguing the petition. Accordingly, this Court would not accept
the said contention after having invested long hours of judicial time. The
petitioners could have raised this ground at the threshold instead of taking
chance of arguing entire matter on merits.
(5) So far as the decisions those are relied upon by the petitioners are
concerned, the said decisions are not applicable in the facts of the present
case. Pertinently, in all the cited decisions, question about the validity and
issuance of show cause notice at the stage of holding inquiry under Section
93 and/or to authorize someone to hold inquiry was not the point of
discussion. In other words, question posed in this petition was not the
subject matter of any of the cited decisions.
(i) So far as the decision in the case of Laxmidas Kurjibhai (supra) is
concerned, in the said decision the challenge was to the final order of
inquiry under Section 93, whereas in the case on hand, what is challenged
in the present case is not the final order but, an order of appointing
authorized officer to hold inquiry under Section 93 of the Act.
(ii) So far as the decision in the case of Chhaganbhai Narottamdas Patel
(supra) is concerned, the said decision has been rendered in the different
set of facts and in a different context. However, one thing which is worth
noticing in the said decision is that the Court has held the provision of
Section 93 as administrative in nature.
(iii) So far as the decision in the case of Kheda District Cooperative
Purchase and Sales Union Ltd (supra) is concerned, the said decision
has been cited only with a view to show that the practice of issuance of
show cause notice is in existence. The said petition against the show cause
notice was not entertained on merits, however, the practice of issuance of
show cause notice was not disapproved. On going through the said
decision, true it is that the said petition was entertained and dismissed on
merits, but that would not per se approve the practice adopted by the State
Government of issuance of show cause notice at the administrative stage of
Section 93. It further appears that in the said decision, the question with
regard to issuance of notice at the stage of appointment of Authorized
Officer to undertake inquiry under Section 93, was not at all raised and
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considered. The said decision is, therefore, not applicable to the present
case.
(iv) So far as the decision in the case of Vipulbhai M. Chaudhary (supra)
is concerned, the said decision is also cited only with a view to show that
the practice of issuance of notice before holding an inquiry under Section
93 has been taken note of by the Division Bench of this Court and thus, the
said practice is impliedly approved. In my view, in the case before the
Division Bench, although the fact was recorded with regard to issuance of
notice before holding of inquiry under Section 93, however, the ultimate
challenge before the Court was against the issuance of show cause notice
by Section 93 and not against the order appointing the authorized person to
hold the inquiry. Thus, merely recording of some facts with regard to
issuance of notice, without there being any deliberation thereof, cannot be
held to be approving the practice of issuance of show cause notice before
holding inquiry under Section 93.
(v) So far as the decision in the case of Surjisinh Amarsinh Mangrola
(supra) is concerned, the said decision admittedly not on merits. On the
contrary, on the basis of the statement made by the learned AGP, thus
same is not binding in nature.
18. In view of the aforesaid discussion, this Court is not having slightest
doubt in the mind that the respondent No.1 has committed blatant illegality
insofar as issuing notice upon the petitioners at the stage of taking decision
to authorise the officer to hold inquiry under Section 93 of the Act.
Therefore, the practice adopted of issuing show cause notice and holding
pre-inquiry by the respondent No.1 at the administrative stage is highly
deprecated. The respondent No.1, therefore, in my view, could not have
introduced any such inquiry and / or practice by issuing the show cause
notice prior to holding an inquiry under Section 93 and/or authorizing
person to hold an inquiry being not approved by the provisions of law.
I answer the question accordingly.
19. For the foregoing reasons, present petitions are bereft of any merits
and the same deserve to be dismissed. Accordingly, the present petitions
are dismissed with no order as to costs. Rule is discharged.
20. Needless to clarify that the petitioner shall be at liberty to raise all
such contentions before the Authorized Officer in an inquiry under Section
93 of the Act and the Authorized Officer shall consider all the contentions of
the petitioner independently and strictly in accordance with law.
21. Since the issue involved in these petitions, is important in nature as
it is directly connected with the daily administration of quasi-judicial
functions of the Cooperation Department, this Court finds it necessary to
send the copy of this judgment to the Ministry of the Cooperation
Department as well as to the Principal Secretary of the Cooperation
Department for their kind perusal and compliance."
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14. The aforesaid decision came to be confirmed by the Division
Bench of this Court in Letters Patent Appeal Nos. 1055 of 2025 & 1059
of 2025, whereby, the Division Bench has observed in paras-3 to 6 as
under :
"3. Sub-section (1) of Section 93 provides that on submission of an inquiry
report under Section 86, the Registrar, if satisfied, on the basis of the said
report, may initiate proceeding under Section 93, to investigate the conduct
of such person(s) imputed in the inquiry report after framing charges and
giving reasonable opportunity of hearing. Thus, a perusal of sub-section (1)
of Section 93 indicates that the person(s) against whom inquiry is initiated,
will have reasonable opportunity of hearing before the Registrar concerned,
for the instant case, the District Registrar authorized by respondent No.1.
4. A perusal of the judgment impugned indicates that the learned Single
Judge has taken exception only to the observations made by the
respondent No.1, namely the Director (Sugar), in the order entrusting
inquiry to respondent No.2 under Section 93 (1) of the Act' 1961, by
observing that there was no occasion for the Registrar / Director (Sugar) to
make any observations on the merits of the inquiry report, while
authorizing a subordinate officer to hold inquiry under Section 93 (1),
inasmuch as, the inquiry entrusted to the Authorized officer would be a
mere empty formality and the whole exercise would become meaningless,
if observations in the order entrusting inquiry are allowed to stand.
5. Considering various arguments raised before him, the learned Single
Judge has reached at the conclusion that the order impugned of authorizing
another officer to hold inquiry under Section 93, being administrative in
nature, the remedy of appeal would not be available. The learned Single
Judge also deprecated the practice of issuing show cause notice and
holding pre-inquiry by respondent No.1 at the administrative stage. It was
observed that there was no occasion for the respondent No.1 to issue a
showcause notice prior to holding of the inquiry under Section 93 while
authorizing an officer to hold such inquiry.
6. However, while saying so, leaving it open for the Authorized officer to
conduct inquiry in accordance with Section 93 of the Act' 1961 it was
observed that all contentions made by the petitioners before the Writ Court
would be open to be raised before the authorized officer in the inquiry and
that the authorized officer shall consider all the contentions of the
petitioners in an independent way strictly in accordance with law."
15. Thus, the Division Bench has observed that the inquiry is to be
conducted by the authorized officer in accordance with law under the
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provisions of Section 93 of the Act and therefore, in view thereof, it is
not open for this Court to go into the aspect as to whether the
respondent No.1 is competent or not for initiating action while
exercising jurisdiction, which, in my opinion, is impermissible and
therefore, under such circumstances, the present petition is required
to be dismissed. The issue agitated by the learned counsel for the
petitioners relating to the supersession of the subsequent notification
will be gone into appropriate proceedings.
16. This Court in the case of Rughnathpura Saurashtra Nagrik
Dhiran Sahkari Mandali Ltd Vs. State of Gujarat and others
reported in 2014 LawSuit(Guj) 106 has decided identical issue with
regard to the notification dated 21.07.2011, issued by the Agriculture
and Cooperation Department of the State Government. By the said
notification, all earlier notifications were superseded and therefore,
the Joint Registrar lost jurisdiction of re-audit of the accounts of the
society under Section 84(6) of the Act. While dealing with the
submissions, the Court has observed that by notification dated
21.07.2011, the State Government has conferred powers of Registrar
in respect of some provisions of the Act to different officers. These
powers are conferred by using the words "in supersession of all the
notifications issued in this behalf". The phrase "in this behalf" is to be
read in the context of conferment of the powers of the Registrar for
the provision mentioned in the notification. The Court has further
observed that in respect of Section 84 of the Act, by the notification
dated 21.07.2011 only the powers under Section 84(1) to (5) of the
Act appear to have been lifted from the earlier notification and given
to the Additional and Joint Registrar (Audit). However, the powers
under Section 84(6) [now 84(5)] as has been available with the Joint
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Registrar and Special Auditor as per the notification dated 26.12.1990
are not disturbed. Therefore, the contention raised by learned counsel
Mr.Joshi that by notification dated 21.07.2011, all earlier notifications
are replaced even for powers under section 84(6) of the Act cannot be
accepted.
17. So, in the present facts of the case, the Notification of the year
1985 was superseded by the subsequent Notification of the year
2011, but it is read in the context of the power which is vested with
the Director, Sugar appointed as Registrar and, therefore, the
contention raised by the learned counsel Mr. Masoom Shah for the
petitioners, is not tenable in the eyes of law and not accepted by this
Court.
18. For the foregoing reasons, the present petition is hereby
dismissed. Rule is discharged. There shall be no order as to costs.
Interim relief, if any, granted earlier, stands vacated forthwith.
(HEMANT M. PRACHCHHAK,J)
FURTHER ORDER
Learned counsel Mr. Masoom Shah has requested that the
interim relief may be extended for a further period of four weeks.
No case is made out for extension of the interim relief and
therefore, the request made by the learned counsel Mr. Shah is
hereby refused.
(HEMANT M. PRACHCHHAK,J)
Dolly
