( 1 ) PETITIONER is a District Central Co-operative Bank Limited. By order dated 7th December, 1995 respondent No. 1, State of Gujarat, nominated Shri Hiralal Jagmal Joshi. Shri Hathibhai Chelabhai Vaghela and shri Parbathai S. Patel as members of the Committee of the petitioner-bank in exercise of its power under Section 80 (1) of the Gujarat Co-operative societies Act, 1961 ("act" for short ). This order dated 7th December, 1995 (at annexure "a" to the petition) is the subject-matter of challenge in this Special civil Application.

( 2 ) IT has been contended by the learned Counsel for the petitioner that the condition precedent for exercise of power under Section 80 (1) of the Act is that either the State Government has subscribed to the share capital of that society. whether directly or through another society or must have guaranteed repayment of the principal of and payment of interest on, debentures issued by it or the State Government must have guarantee repayment of the principal of and payment of interest on the loans raised by the society concerned. As none of the conditions exists in the present case, the State Government has no authority to nominate any member on the Committee of the petitioner- bank. It was also contended that it is not a case in which resort has been taken to exercise of power under sub-section (2) of Section 80 of the Act, inasmuch as, as per the law laid down by this Court, for exercise of power under sub-section (2) of Section 80 of the Act. the State Government is under obligation to afford an opportunity of hearing before nominating its representative on the committee of any society in the public interest.

( 3 ) SO far as the second contention of the learned Counsel for the petitioner about the action being not traceable to exercise of power under sub-section (2) of Section 80 of the Act is concerned, the respondents do not join issue.

( 4 ) HOWEVER. Mr. M. R. Anand. learned Government Pleader, contends that, from the facts and circumstances of the present case it is apparent that the State Government stands in a position of guarantor for repayment of loan raised by the society. As per contention by its letter dated 26th September. 1992, the National Bank for Agriculture and Rural Development ("nabard" for short), established under the National Bank for Agriculture and Rural development Act, 1981, (hereinafter referred to as act of 1981") had sanctioned a medium term loan on account of failure of Kharif 1991 crops by extending credit limit upto 12443. 04 lakhs to the State Co-operative Bank under Section 22 of the Act of 1981. Under clause (xi) of the said sanction letter, the State Co-operative Bank was entitled to draw on the above limit of rs. 12443. 04 lakhs to an extent not exceeding 60% of the amount actually converted amount of the due of the Societies affiliated to the concerned central co-operative Banks and which are affected by conditions of famine/scarcity due to nature calamity of the evaluated financial assistance for assisting the famine affected areas. As per the Schedule appended, as regards the total base level conversion amount in respect of areas catered by the relevant District central Co-operative Banks respectively. separate amount was shown. It was stipulated that while 60% of the required amount shall be contributed by the nabard by way of credit facility to the State Co-operative Bank balance 40% shall be provided by the State Government. State Co-operative Bank and concerned Central Co-operative Bank in the ratio of 15% : 10% : 15%. Under clause (xii), it was stipulated that the State Co-operative Bank shall utilise the amount so withdrawn in such a manner that they are used by the concerned central co-operative Bank only for advancing medium-term loans to affiliated primary credit societies mentioned in clause (a) for enabling them to repay the short-term loans taken by them from the central co-operative Banks for financing seasonal agricultural operat