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Shree Bileshwar Khand Udyog Khedut Sahkari Mandali Ltd. and anr. Vs. State of Gujarat and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Appln. No. 5609 of 1982
Judge
Reported inAIR1984Guj202
ActsGujarat Co-operative Societies Act, 1961 - Sections 80(2); Constitution of India - Article 226
AppellantShree Bileshwar Khand Udyog Khedut Sahkari Mandali Ltd. and anr.
RespondentState of Gujarat and ors.
Appellant Advocate P.M. Raval, Adv.
Respondent Advocate G.D. Bhatt, Addl. Government Pleader for; B.K. & G. and;
Excerpt:
.....neither of the two conditions is satisfied in this case. simply because he happens to be belonging to a particular political party, his appointment cannot be said to be..........directions given by the court are very clear. the directions pertain to the orders passed or to be passed by the government under the provisions of statute where it is provided that the society concerned should be given an opportunity of being heard before passing the order. if one reads s. 80 of the act and particularly s. 80(2) of the act, it becomes clear that the section does not contemplate that a hearing should be given before passing the order. s. 80(2) of the act reads as follows : -'where the state government is of the opinion that having regard to the public interest involved in the operation of a society, it is necessary or expedient so to do, it may nominate its representatives on the committee of such society as if the state government had subscribed to the share capital of.....
Judgment:
ORDER

1. This matter was called out for final hearing on March 16, 1984. The counsel for the respondents had filed sick note and was not available. Hence, the matter was adjourned. On the same day, a fresh board was notified and it had been made known to all concerned that the matter shall be taken up in serial order and in no case, adjournment shall be granted. Today, when this matter is called out, the counsel for the petitioner is absent. The counsel for the respondent has been requested to proceed further with the matter. After some time, Mr. Cbapaneri, learned junior of Mr. P. M. Raval, advocate for the petitioners, has come in the Court room. He stated that Mr. Raval is busy in another Court. When he was requested to proceed with the matter, he expressed his inability. As notified earlier, the matter is proceeded further, It may be noted that during the course of this sitting, which has commenced on February 28, 1984, except for few days, everyday, I have sat idle at least for about two to three hours. Every time, of and on, when the matter is called out, the request is made to accommodate the advocate on the ground that he is busy in another Court. Granting of accommodation on this ground has almost paralysed the working of the Court. The situation seemed to be going out of control. Therefore, with a view to give sufficient notice to the advocates, it has been specifically mentioned in the Board that the matters shall be taken in serial order and in no case adjournment shall be granted. Despite this clear notice, if the counsel for the petitioners has not made proper arrangement and the learned junior, who is present in the Court, is not in a position to make submissions in support of the petition, it cannot be helped. If I do not proceed further with the matter, I will be failing in my duty.

2. The petitioner No. 1 is a cooperative society and registered under the provisions of the Gujarat Co-operative societies Act, 1961. The petitioner No. 2 is Director of petitioner No. 1 society. The State Government, in exercise of its power conferred under S. 80(2) of the Act, passed order dated December 17,1982, and appointed respondent Nos. 7 and 8 as the Government nominee Directors of the petitioner No. I society. By the aforesaid order, the Government also appointed Deputy Secretary and Financial Adviser, Agriculture and Forest Department as a director. The legality and validity of the aforesaid order, which is produced at Annexure-B, has been challenged by the petitioners herein.

3. It is contended that in view of interim order passed by this Court in Special Civil Appln. No. 5008 of 1982, the Government could not have passed any order whatsover under the provisions of S. 80(2) of the Act. The petitioners contended that this High Court has stayed the operation of S. 80 of the Act. Therefore, the Government could not have taken any action whatsover under the provisions of the said section. The contention does not seem to be well founded. The interim order passed by this Court (M. P. Thakker, C. J. as he then was and b. H. Shukla J.) in Special Civil Application No. 5008/82 is produced at Annexure-A to the petition. This Court has not stayed the operation of S. 80 of the Act by passing the said interim order. The Court has merely directed that whenever statute requires that reasonable opportunity of being heard be given to the society, the same should be given. It has also been made clear that the Government shall not be obliged to give a hearing unless it is so desired by the petitioner society. The directions given by the Court are very clear. The directions pertain to the orders passed or to be passed by the Government under the provisions of statute where it is provided that the society concerned should be given an opportunity of being heard before passing the order. If one reads S. 80 of the Act and particularly S. 80(2) of the Act, it becomes clear that the section does not contemplate that a hearing should be given before passing the order. S. 80(2) of the Act reads as follows : -

'Where the State Government is of the opinion that having regard to the public interest involved in the operation of a society, it is necessary or expedient so to do, it may nominate its representatives on the committee of such society as if the State Government had subscribed to the share capital of the society and the provisions of sub-see. (1) shall, so far as may be apply to such nomination'.

Therefore, the contention raised on the basis of the interim order passed by this Court in Special Civil Application No. 5008/82, is without any substance and requires to be rejected.

4. In the petition, it is further contended that the Government can exercise power under S. 80(2) of the Act only for the purposes of public interest and only when it is found expedient. It is contended that neither of the two conditions is satisfied in this case. This submission is controverted on behalf of the Government in affidavits-in-reply dated January 27, 1983 and April 19, 1983, filed by Mr. D. K. Patel. Deputy Secretary, Co-operation Department. In paragraph-1 of the affidavit-in-reply dated January 27, 1983 it is mentioned that the annual turnover of the society is between Rs. 15 to 20 crores. It is further stated that in the year 1956-57, the State Government had sanctioned share capital of Rs. 10 lacs. In 1960-61, another amount of Rs. 10 lacs was sanctioned by way of share capital. The said amount has been returned in the year 1971-72. On this basis, it is submitted that for about 17 years, the Government had supported the society by way of contribution towards share capital. It is further pointed out that there are about 6722 cane growers who are the members of the society. The respondent No. 7 has tried to point out that the society had incurred huge loss and the losses amounted to near about Rs. 1 crore and 15 lacs. In this view of the matter, if the Government thought that on a particular Board of Directors, it was necessary that the Government nominees be also appointed, the same should be considered to be expedient and also in the public interest. Therefore, it is contended that the action of the Government is in accordance with the provisions of law. It may be noted that the petitioner-society manufactures sugar. In the factory labourers-permanent, temporary and even contract labour may be required to be engaged. Therefore, it would be in the public interest to appoint Govt. nominees at least to see that the provisions of labour legislation are properly observed and strictly complied with.

5. At this stage, the counsel for the petitioner has appeared and I have heard him fully on all the points involved in the petition.

6. As far as the interim order passed by this Court is concerned, his submission is that in S. 80(2) of the Act, the right of being heard should be read 'by the Court. According to him, prior to the amendment, the Government had power to appoint its own representatives on the committee of a society in which the Government had financial interest. In respect of other societies, the Government had no such power. It is only after the amendment that the Government has been conferred with this power. Therefore, according to him, under the provisions of the Act, the right of hearing is implied.

7. While making this submission, it is assumed that the order that is being passed under S. 80(2) of the Act viz. that of making appointment of Government representatives as directors, is against the interest of the society. The principles of natural justice require that a person is required to be heard before any order adverse to the interest of that particular person is passed. Only in cases where such an order is being passed, the question of reading the right of being heard may arise. Can it be said that when the Government appoints any person as its nominee in a cooperative society under the provisions of S. 80(2) of the Act, such appointment order would be against the interest of the society? Or would it be an act against the interest of the members of the society? There are certain fields where the Government control by way of supervisory watch over the administration is necessary. In this case, there will be only marginal representation of the Government on the managing committee of the society. Why should there be not some control, or to put it in another way, why not little more participation in, and watch over, the administration of a co-operative society 9 What is wrong if the Government thinks that in a society where public interest is involved, the representatives of the Government are also appointed'? Such an action without there being anything more, cannot be said to be against the interest of the society. Therefore, the argument that the right of hearing should be read as an implied right, has no basis and the same has got to be rejected.

8. The counsel for the petitioners submit that the right of' hearing is necessary because the Government may not have adequate material before it. The Government may not be in a position to know as to what is the actual financial position of the society, what is the actual position with regard to the management of the society. Therefore, if hearing is granted, the society will be in a position to make representation before the Government and may make the position clear. The argument is based on conjectures. As per the provisions of the Co-operative Societies Act, the Government officers are required to be in touch with the affairs of the society. So much so that the Joint Registrar of the Co-operative Societies (Sugar) is appointed to look after the affairs of societies. If the Government passes any order without there being any material and/or the Government takes into consideration extraneous factors before passing the said order, same can be challenged on that ground. If it is so proved, the same may even be quashed by the Court. But that does not mean that the Government shall always take into consideration irrelevant and extraneous material and shall not pass order in accordance with law. There is no warrant for presumption that the order which maybe passed under S. 80(2) of the Act, will always be against the interest of the society and therefore hearing should always be granted.

9. The counsel for the petitioners submitted that the impugned order (Annexure-B) has been passed with mala fides. In his submission, there were 10 elected members. Out of which, 2 belonged to Congress party. There were other two Government nominee Directors, (i) District Registrar, being nominee of the Joint Registrar, Co-operative Societies (Sugar) and another (ii) a nominee of the Apex Bank, which is a financing institution. According to the petitioners, both these Directors can be said to be of Congress party. On this basis, the petitioners have summed up the situation as follows-

'Thus, out of 12 Directors at present, there are four Directors who can be said to be the members of Congress-I party or supporting them. However, the eight members who belong to the opposition are in majority and they are in management'. There is factual inaccuracy or error. It is nowhere stated in (he petition that Apex Co-operative Bank is under the control of Congress '1' party. Therefore, the assumption that the nominee of Apex Bank is also that of Congress 'I' party, is without any evidence. The entire edifice as far as the ground of mala fide is concerned, is built up on the aforesaid basis for which there is no evidence. Moreover, even if all the allegations of mala fide are held to be correct, then even the Congress (I) party will not be in a position to acquire majority. Thus, the ground of mala fides having been raised without there being any evidence for the same and since the same appears to be imaginary rather than real, cannot be accepted.

10. Further as stated in the affidavit-in reply dated March 2, 1983, filed by the respondent No. 2, the entire position is changed. After the petition was filed the election of the managing committee of the society was held and the result has been declared on March 1, 1983. The second Petitioner who had contested the election from Devli Constituency has lost. In the said election, altogether a new committee has been elected. A copy of this affidavit in-rely has been served upon the counsel for t9e petitioners on March 2, 1983. The averments made therein have not been controverted by filing. affidavit-in-reply or even b making oral submissions even today. he contention in respect of mala fide is based on facts which existed at the time of filing of the petition. At the present, entire complexion is changed. It is not pointed out as to what is the position today. It is not shown that even today, if the impugned order is allowed to come into operation, the order can be stigmatized as actuated by mala fides. Since the very basis of the argument of mala fide is completely changed, it is not necessary to go into the further details.

11. So far as the appointment of respondent No.7 is concerned, it is disclosed by the respondent No. 7 that he was an employee of the society. After he was elected as a Member of the Legislative Assembly, he ceased to be an employee of the society. Thus, here is a person, who has a working knowledge of this very cooperative society. He is a chosen representative of the people, in whom, at least for the time being, people have reposed their confidence. e still continues to be M.L.A. Therefore, it cannot be said that the appointment of respondent No. 7 has no nexus with the object to be achieved. Similarly, respondent No. 4 is the Vice-President of Taluka Panchayat. The posts of President and Vice-President of Taluka Panchayat are also elective posts. Persons holding the position have the mandate of the people. They command the confidence of the people and that is why they occupy the post. After a particular time, they are required to go again to the people and seek fresh mandate. It is not stated in the petition that the appointment of respondent No. 4 is in any way improper or unjust. Simply because he happens to be belonging to a particular political party, his appointment cannot be said to be bad. The argument based on the ground of political connection of these people would have some relevance, had the position as it existed on the date of filing the petition continued even today. But as disclosed in the affidavit-in-reply filed by the respondent No. 7, the entire position is completely changed. Therefore, the argument with regard to mala fides being without substance, has got to be rejected.

12. No other contention is raised.

13. Hence, the petition fails and the same is ordered to be rejected.

14. Petition dismissed.


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