IMPORTANT POINT
Bye laws of a society cannot prevail over the Act and Rules framed thereunder.

Headnote:(a) Gujarat Specified Co-operative Societies Election to Committee Rules, 1982 – Rule 3-A(8), (9) – Rule 3-A(8) provides for geographical or territory or zone wise bifurcation or division – This provision applies to societies operating in more than one village – No of seats would be equal to no. of constituencies, excluding two seats reserved u/s 74B, Gujarat Cooperative Societies Act, 1961 – Preparation of voters’ list to be prior to or simultaneous with delimitation of constituencies, but voters’ list has to be as per delimitation of constituencies – Collector is empowered and responsible for delimitation. (Para 16, 17, 18)
       (b) Gujarat Specified Co-operative Societies Election to Committee Rules, 1982 – Rule 3-A (8) & (9) – Bye laws of any society have to be in conformity with the provisions of the Act and the Rules – Bye laws of any society cannot prevail over the Rule 3-A (8) & (9). (Para 19, 21)
       (c) Constitution of India – Article 13(2) and 243ZK – Election to Managing Committee or Board of a society – Must be democratic. (Para 22, 23)
       (1973) 4 SCC 225; (2006)7 SCC 1 – Relied upon
       (1984) 2 GLR 1244; (2004)1 GLR 310; (2010) 3 GLR 2154; (2012)1 GLH 245; (2012) 2 GLR 1522; (1972) 1 SCC 719 – Referred

       Facts of the case:
       The Gujarat Cooperative Societies Act of 1961 was amended by the Act of 1982. By the Act of 1982, the proviso was inserted by way of an amendment to the effect that so far as the committee of a society falling in the category of Section 74C(1) of the Act is concerned, the rotation for retirement, if provided by the bye-laws of a particular number of members of the Managing Committee shall cease to remain in force.
       Further, Section 74C and other provisions provided that the election of the members of the Managing Committee/Board and the office bearers on the committees of such specified societies shall be conducted in the manner laid down by or under Chapter XI-A of the Act, which was also simultaneously inserted by way of amendment Act of 1982, for conducting elections to the committees and office bearers of certain societies which are so specified under Section 74C(1) of the Act.
       As per the scheme of the said chapter, the election of such specified societies is required to be held on such date or dates as the Collector may fix under his control.
       So far as the societies included as specified societies under Section 74C(1) of the Act are concerned, a separate mode of conducting election was provided and the power of conducting such election was given to the Collector notwithstanding anything contained in the bye-laws of such societies.
       The State Government of Gujarat framed the Gujarat Specified Co-operative Societies Election to Committee Rules of 1982. In the year 1987, Rules 3-A and 3-B were inserted in the Rules of 1982 which provided for delimitation of the constituencies in the respective society/societies, for the purpose of conducting election of the Managing Committee Members and a separate procedure was provided for election of members reserved in sub-section (1) of Section 74B of the Act.
       The constitutional validity of the amended provisions of the Act of 1982 was challenged before the High Court. The Division Bench of the High Court declared Sections 17(A), 24, 51(2), 69 and also the proviso to Section 74 as ultra vires the Constitution. However, the provisions of Sections 74A, 74B, 74C, 74D, 76A, 76B, 80(A) and 80(2) were upheld.
       A legal question for interpretation to Rule 3-A (8) and also the validity of bye-laws clause No. 35(1)(A) of Sabarkantha Milk Producers Union Ltd. arose before the High Court. The Single Judge of the High Court held that Section 74C sub Section (3) of the Act, has an overriding effect on any other bye-laws of such society. It was also found that as per Rule 3-A (8), the number of constituencies have to be equal to the total number of seats excluding two reserved seats as provided under Section 74B of the Act. The learned Single Judge in the said case found that the bye law No. 35(1)(A), provided seats for more than one person for each constituency and therefore, the bye laws were not in conformity with Rule 3-A (8) of the Rules and found that the bye-laws can operate to the extent of 7 representatives to be elected from 7 separate constituencies of a Specified Cooperative Society and therefore, the High Court has held the Rule 3-A(8) of the Rules as valid to that extent only.
       In the meanwhile, the Division Bench of the Gujarat High Court once again went into the holding of election to the Managing Committee of the Bank in accordance with Rule 3-A (8) of the Rules. The Division Bench found that when Rule 3-A (8) and Rule 43 are examined in juxtaposition, it has held that the object and intendment of the said Rules and the field of the operation of the said two provisions are different inasmuch as the former deals with “constituencies” bifurcated on the “territorial/zone basis”. The Division Bench did consider the view taken by the learned Single Judge of Gujarat High Court in the case of Antakampa Milk Producers Co-operative Society Limited (supra) and found that in the said case, the constituencies were bifurcated zone or territory wise.
       The second Division Bench of the High Court found that the bye law providing more than one representative to be elected in more than one constituency would be in contravention of Rule 3-A (8).
       Further, the constitutional validity of Rule 3-A(8) of the Rules was again challenged before the High Court wherein the Division Bench of the High Court held that if any of the Rules are lawfully framed under the provisions of the Act and restrictions were imposed in relation to the subject matter of any of the clauses of the registered bye laws of the Society, such restrictions must be adhered to by it and any such clause in the bye-laws which is in violation of the restriction imposed by the Rules should be deleted. The Division Bench of the High Court held that Rule 3-A (8) of the Rules is neither in conflict with any of the provisions of the Act nor was it held to be bad in law for want of Authority of the delegated legislation. Therefore, Rule 3-A(8) of the Rules was held to be legal and valid by the High Court by giving its reasons.
       Similar questions regarding the legality and validity of Rule 3-A(8) of the Rules again arose with the present group of appeals.
       The Division Bench of the High Court formulated the following legal issues and referred the same to the full Bench:
       (1) Whether Rule 3-A of the Rules introduced by the amendment dated 10.08.1987 could be applied to the societies bye-laws which provide for a single constituency?
       (2) Whether the scheme of the Rules permit the specified societies having a single constituency, more than one seat for one constituency and whether members of such society can legally be permitted to vote for more than one seat?
       (3) Whether Collector has jurisdiction to make an order for delimitation of the constituencies, in absence of any proceeding undertaken in accordance with Section 14 of the Act?
       (4) Whether delimitation of the constituencies under Rule 3-A of the Rules can only be territory-wise and/or whether delimitation of the constituencies can be based upon objects and activities of the member societies or classes of individual members?
       The full Bench of the High Court answered the legal questions against the appellant-societies by passing the impugned judgment and orders.

       Finding of the Court:
       Impugned judgment does not require interference.
       Result: Appeals dismissed.

JUDGMENT

V.GOPALA GOWDA, J.

The applications for impleadment filed in the SLP(C) Nos. 29726 of 2013, 29727 of 2013 and 29728 of 2013 are allowed. Leave granted in all the special leave petitions.

2. The appellants before this Court have filed these appeals questioning the correctness of the impugned orders dated 15.11.2011, 30.1.2012 (passed by the Division Bench) and common impugned order dated 04.07.2013 (passed by the full Bench) of the High Court of Gujarat at Ahmedabad.

3. Since all the appeals are identical in nature, we would refer to the facts of the case arising out of Civil Appeal @ SLP(C) NO. 26017 of 2013 for the sake of convenience and brevity and for examining the rival legal contentions urged in these appeals.

4. The State of Gujarat enacted and put on the statute book, Gujarat Cooperative Societies Act of 1961 (in short “the Act”) in order to consolidate and amend the laws relating to the cooperative societies in the State of Gujarat. Thereafter, the Act was amended by the Act of 1982. Initially, as per the Act of 1961, the Managing Committee of the Co-operative Society was to be constituted in accordance with the Act, Rules and bye-laws. By the Act of 1982, the proviso was inserted by way of an amendment to the effect that so far as the committee of a society falling in the category of Section 74C(1) of the Act is concerned, the rotation for retirement, if provided by the bye-laws of a particular number of members of the Managing Committee shall cease to remain in force.

5. Further, as per the Act of 1982, Section 74C together with the other provisions of the amending Act was brought on the statute book, which provided that the election of the members of the Managing Committee/Board and the office bearers on the committees of such specified societies shall be conducted in the manner laid down by or under Chapter XI-A of the Act, which was also simultaneously inserted by way of amendment Act of 1982, for conducting elections to the committees and office bearers of certain societies which are so specified under Section 74C(1) of the Act. As per the scheme of the said chapter, the election of such specified societies is required to be held on such date or dates as the Collector may fix under his control. Prior to the amendment, the election of the managing committee was to be conducted by the society itself as per its registered bye-laws. So far as the societies included as specified societies under Section 74C(1) of the Act are concerned, a separate mode of conducting election was provided and the power of conducting such election was given to the Collector notwithstanding anything contained in the bye-laws of such societies. The said aspect was made clear under the provisions of Section 74(C) (2) and (3) of the Act which were inserted by way of amending Act of 1982. Chapter XI-A of the Act provides for separate mode for deciding the election dispute by Election Tribunal. Section 145(U) of the Act provided the State Government with rule making power and to regulate all or any of the other matters relating to the various stages of elections including preparation of the list of voters.

6. In exercise of the powers conferred upon the State Government under Section 168 read with Sections 145(A), 145(U) and 145(Y), the State Government of Gujarat framed the Gujarat Specified Co-operative Societies Election to Committee Rules of 1982 (in short “the Rules”). These Rules provide for various stages of election from the preparation of the voters list till the result is declared and further consequential steps to be taken in the process. In the year 1987, Rules 3-A and 3-B were inserted in the Rules of 1982 by the Rule Making Authority which provided for delimitation of the constituencies in the respective society/societies, for the purpose of conducting election of the Managing Committee Members and a separate procedure was provided for election of members reserved in sub-section (1) of Section 74B of the Act.

7. The constitution

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2014 Supreme(SC) 815

IMPORTANT POINTBye laws of a society cannot prevail over the Act and Rules framed thereunder.

Cases Referred (8)

IMPORTANT POINT
Bye laws of a society cannot prevail over the Act and Rules framed thereunder.