Skip to content


Chimanbhai Dadubhai Desai and anr. Vs. Chaturbhai P. Patel and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Appln. No. 1558 of 1969
Judge
Reported inAIR1971Guj156; (1971)GLR31
ActsGujarat Co-operative Societies Act, 1961 - Sections 86(1) and 155
AppellantChimanbhai Dadubhai Desai and anr.
RespondentChaturbhai P. Patel and ors.
Appellant Advocate C.T. Daru and; R.M. Vin, Advs.
Respondent Advocate J.S. Patel, Adv. of H. Desai & Co. Addl. Govt. Pleaders
Cases ReferredRohtas Industries Ltd. v. S. D. Agarwal
Excerpt:
.....- application rejected - petition filed - joint registrar was in error in taking view that no revision application lay against order made by district registrar directing enquiry under section 86 (1) - wrongly refused to exercise jurisdiction vested in him by section 155 - order passed by joint registrar set aside. - - we postponed the consideration of the question as to whether a rule as to the other reliefs should be issued or not since it was apparent that if the order rejecting the revision application was bad, the registrar would have to hear the revision application and in that event we may not, in the exercise of our discretion, interfere at this stage with the original order made under section 86(1). that is how the petition is before us to-day only for hearing of the..........m. parikh, district registrar, co-operative societies (rural) ahmedabad be appointed as the inquiry officer for the purpose of holding the inquiry. the petitioner being aggrieved by the order instituting the inquiry, preferred a revision application to the registrar, co-operative societies, gujarat state, who is respondent no. 3 before us, under section 155 of the act. this revision application was rejected by the joint registrar, administration and appeals, co-operative societies and the reasons which weighted with the joint registrar in rejecting the revision application were as follows: -'with reference to your application dated 6-10-1969 bearing on the above subject, we are to inform you that order for inquiry passed u/s. 86 does not affect as such the rights of any party......
Judgment:

Bhagwati, C.J.

1. By an order dated 19th September 1969, the District Registrar, Co-operative Societies, Nadiad. in exercise of the power vested in him under Section 86(1) of the Gujarat Co-operative Societies Act, 1961, directed that an inquiry be instituted into the working, constitution and financial affairs of Charotar Gramoddhar Sahkari Mandal Limited which is the petitioner before us and Shri Harivadan M. Parikh, District Registrar, Co-operative Societies (Rural) Ahmedabad be appointed as the Inquiry Officer for the purpose of holding the inquiry. The petitioner being aggrieved by the order instituting the inquiry, preferred a Revision Application to the Registrar, Co-operative Societies, Gujarat State, who is respondent No. 3 before us, under Section 155 of the Act. This Revision Application was rejected by the Joint Registrar, Administration and Appeals, Co-operative Societies and the reasons which weighted with the Joint Registrar in rejecting the revision application were as follows: -

'With reference to your application dated 6-10-1969 bearing on the above subject, we are to inform you that order for inquiry passed u/s. 86 does not affect as such the rights of any party. Inquiry under Section 86 is only a fact finding process and hence there cannot be any appeal or revision against such an order. Under the circumstances, your revision application is filed in this office'.

This order made by the Joint Registrar is challenged in petition. The petitioner also challenges the original order of the District Registrar instituting the inquiry on various grounds which include interalia a ground relating to the constitutional validity of Section 86.

2. When the petition came up for admission before us on 3rd December 1969, we directed issue of notice to the respondents as we felt prima facie that Section 155 was wide enough to cover a Revision Application against an order made under Section 86(1) and the Joint Registrar was in error in rejecting the Revision Application as not maintainable and an opportunity may, therefore, be given to the Joint Registrar to rectify the said error. But the stand taken by the Registrar at the hearing of the notice was that no revision application was maintainable against an order made under Section 86(1). We, therefore, issued a limited rule directed against respondent No. 3 to show cause why the order rejecting the revision application should not be quashed and set aside. We postponed the consideration of the question as to whether a rule as to the other reliefs should be issued or not since it was apparent that if the order rejecting the revision application was bad, the Registrar would have to hear the revision application and in that event we may not, in the exercise of our discretion, interfere at this stage with the original order made under Section 86(1). That is how the petition is before us to-day only for hearing of the rule as to the validity of the order rejecting the revision application.

3. The short question which arises for consideration on these facts in whether a revision application lies under Section 155 against an order made under Section 86 sub-section (1). Section 155 which confers the revisional power is in the following terms: -

'155. The State Government and the Registrar may call for and examine the record of any inquiry or the proceedings of any other matter of any officer sub-ordinate to them, except those referred to in sub-section (9) of Section 150 for the purpose of satisfying themselves as to the legality or propriety of any decision or order passed, and as to the regularity of the proceedings of such officer. If in any case, it appears to the State Government, or the Registrar, that any decision or order or proceedings so called for should be modified, annulled or reversed, the State Government or the Registrar, as the case may be, may after giving persons affected thereby an opportunity of being heard pass such order thereon as it or he may deem just'.

The Section is couched in very wide language and it empowers the State Government and the Registrar to call for and examine not only the record of any inquiry but also 'the proceedings of any other matter' of any officer subordinate to them for the purpose of satisfying themselves as to the legality or propriety of any decision or order passed and as to the regularity of the proceedings of such officer. The words 'the proceedings of any other matter' are words of great width and amplitude and they take in all proceedings before any officer subordinate to the State Government or the Registrar. Now where an order under Section 86 sub-section (1) is made by the District Registrar on the basis of the material before him, there is obviously a proceeding before him relating to the question whether an inquiry should be ordered or not and the Registrar can certainly call for and examine the record of that proceeding for the purpose of satisfying himself as to the legality or propriety of the order passed by the District Registrar in such proceeding. The same would be the case where the order under Section 86 sub-section (1) is made by the Registrar; in such a case the State Government would have the power to call for and examine the record of the proceeding before the Registrar and to satisfy itself as to the legality or propriety of the order made by the Registrar. It is no doubt true that power is conferred on the Registrar or the District Registrar under Section 86 sub-section (1), to made an order for inquiring suo motu; but it is apparent that he would act only on the basis of material which may be placed before him either by some person interested or an appropriate officer. Here in the present case the order of the District Registrar shows that he acted on the basis of an application dated 7th August 1969 made by Manubhai Maganbhai Patel and Jairambhai Manibhai Patel. This application obviously initiated a proceeding before the District Registrar and in this proceeding the District Registrar made an order directing an inquiry. The order made by the District Registrar therefore, clearly fell within the plain language of Section 155 and was revisable by the Registrar since the District Registrar was an officer subordinate to Registrar.

4. Mr. Patel, learned Advocate appearing on behalf of the third respondent, however contended that the power of revision under Section 155 was exercisable only where the order or decision sought to be revised affected some right or liability of the parties. Here in the present case, said Mr. Patel, the order passed by the District Registrar was merely an order directing a fact-finding inquiry and it did not affect any substantive right or liability of the petitioner. This contention was sought to be supported by reference to a decision given by a Division Bench of this Court on 21st April 1965 in Special Civil Appln. No. 585 of 1961 (Guj). We do not think this decision supports the contention urged on behalf of the third respondent. This case arose under the Bombay Cooperative Societies Act, 1925 and the question was whether an appeal lay under Section 64 against an order passed by the Deputy Registrar under Section 50-A referring a case for inquiry to his nominee. We pointed out in that case that having regard to the context and the juxtaposition in which the words 'order or decision' occurred in Section 64, it was clear that an appeal under Section 64 lay only against a decision or order which affected some right or liability of parties and since the order of the Deputy Registrar under Section 50-A referring a case for inquiry to his nominee was merely a processual order, not affecting any right or liability of parties, it was not appealable under Section 64. This decision can have no application in construing the scope and ambit of Section 155 of the Gujarat Co-operative Societies Act, 1961. Neither the context nor the juxtaposition of the words 'order or decision' on which we relied in construing Section 64 exists in Section 155. Here the words used are of the widest character and they take in all proceedings in which an order may be made by a subordinate officer. It is a power of a residuary nature empowering the State Government and the Registrar to revise decisions or orders which are not otherwise appealable to the Cooperative Tribunal under Section 150 and this is a necessary power for it is eminently desirable that against orders or decisions which may be passed by the subordinate officers in respect of various matters which are entrusted to them under the Act, there must be a revising authority which can rectify errors arising from bona fide mistake, incompetence, inefficiency or even fraud or corruption or else the object of entrustment of such functions might be frustrated. We are, therefore, not at all satisfied that in order to attract the revisional jurisdiction under Section 155, the decision or order sought to be revised must be a decision or order affecting any right or liability of the parties. But even if this requirement were insisted upon, we think it is satisfied in the present case. An order directing an inquiry is a serious matter for a Cooperative Society. As pointed out by the Supreme Court in Rohtas Industries Ltd. v. S. D. Agarwal, AIR 1969 SC 707, while dealing with the power of the Central Government to order an inquiry under Section 235 of the Companies Act, 1956:

'It is true that the investigation under Section 237(b) is of a fact finding nature. The report submitted by the Inspector does not bind anybody. The Government is not required to act on the basis of that report, the company has to be called upon to have its say in the matter but yet the risk - it may be a grave one - is that the appointment of an Inspector is likely to receive much press publicity as a result of which the reputation and prospects of the company may be adversely affected'.

An order directing an inquiry under Section 86 sub-section (1) may, therefore, involve serious consequences to the Cooperative Society and it is not possible to say that such an order does not affect rights or liabilities of the Co-operative Society.

5. We are, therefore, of the view that the Joint Registrar, Administration and Appeals was in error in taking the view that no revision application lay against an order made by the District Registrar directing an inquiry under Section 86 sub-section (1) and he wrongly refused to exercise jurisdiction which was vested in him by Section 155. We therefore, issue a writ of certiorari quashing and setting aside the order dated 15th October 1969 passed by the Joint Registrar, Administration and Appeals, rejecting the revision application of the petitioner and direct him to entertain the revision application under Section 155 and to decide it after complying with the principles of natural justice. In this view of the matter it is not necessary for us to issue a rule as regards the other reliefs claimed in the petition in regard to the order of the District Registrar under Section 86 sub-section (1). The third respondent will pay the costs of the petition to the petitioners.

6. Petition allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //