Gujarat High Court
Judgename :J.N.PATEL
ISHWARBHAI NAROTTAMBHAI PATEL - Appellant
Versus
K.H.TRIVEDI - Respondent
S.C.A. 7113 of 1992
Decided On : 08/16/2002
Cooperative Societies Act -Sections 93,96 - petitioners were members of the Executive Committee of Shri Khedut Sahkari Khand Udyog Mandali Ltd., which is respondent No. 2 herein and which is a registered cooperative society under the Gujarat State Cooperative Societies Act The society had initially invited offer for supply of certain machinery for its sugar factory and ultimately the contract on turn-key basis was granted to one Bardoli Engineering Works as per the resolution for the amount of Rs. 13,74,000. 00 (Rupees thirteen lacs seventy-four thousand only ). In the order, it was specifically mentioned that the amount of tax and erection charges are included. It is the case of the petitioner that after the issuance of the aforesaid order there was change in the design and, therefore, certain machinery was additionally required to be installed and the same was actually installed by the aforesaid Bardoli Engineering Works and because of the same, the said Bardoli Engineering Works had issued a bill of Rs. 45,51,090. 86 - Petitioners of SCA No. 305/1993 - petitioner of SCA No. 7113/1992 - came up for final hearing - that would the petitioners insist for remand of the matter or would the petitioners have any objection if the matter is examined on merits at par with the case of the other petitioners namely the petitioners of SCA No. 7113/1992 and SCA No. 305/1993 - Special Civil Applications - Civil Application is inter-connected and the inquiry was common -Held the Court ordered for clarifying that it would not attach the disqualification under Rule 32 of the Gujarat Cooperative Societies Act. In the present case for the reasons stated hereinabove, it is found that it was not a case of mistake of utilisation of the fund, but it was rather a case of gross negligence in using the fund for a different purpose than the purpose of the society and no such prudent, elected representative or any person could have condoned the huge amount of Rs. 1,45,000. 00. It is also found that such conduct would attract the action under Section 93 of the Act and when the order under Section 93 of the Act is examined on merits and is found proper, merely because the amount is paid is no ground for removing the disqualification under Rule 32 of the Rules because, in my view, if such indulgence is shown it would frustrate the intention of the legislature to keep such persons out of the affairs of the society at the time of becoming members of the Managing Committee, more particularly when, on account of such persons, the society has not only suffered loss of funds, but the conduct was such that the persons should not be allowed to assume the office. Therefore, on the face of Rule 32 clause (f) and the intention of the legislature, I am of the view that the judgement passed in SCA 4782/1991 is of no help to the petitioners and the said contention also fails - petitions are dismissed.
( 1 ) IN Special Civil Applications No. 305 of 1993 and No. 7113 of 1992 there is a common order and the facts of Special Civil Application No. 476 of 1993 is inter-connected and the inquiry was common and, therefore, all these petitions are being dealt with together by common judgement.
( 2 ) THE short facts of the case are that the petitioners were members of the Executive Committee of Shri Khedut Sahkari Khand Udyog Mandali Ltd. , which is respondent No. 2 herein and which is a registered cooperative society under the Gujarat State Cooperative Societies Act (hereinafter referred to as the "act" ). The society had initially invited offer for supply of certain machinery for its sugar factory and ultimately the contract on turn-key basis was granted to one Bardoli Engineering Works as per the resolution dated 22-5-19984 for the amount of Rs. 13,74,000. 00 (Rupees thirteen lacs seventy-four thousand only ). In the order, it was specifically mentioned that the amount of tax and erection charges are included. It is the case of the petitioner that after the issuance of the aforesaid order there was change in the design and, therefore, certain machinery was additionally required to be installed and the same was actually installed by the aforesaid Bardoli Engineering Works and because of the same, the said Bardoli Engineering Works had issued a bill of Rs. 45,51,090. 86. The aforesaid bill was considered by the Executive Committee of the Society and an amount of Rs. 23,41,000. 00 (Rupees twenty-three lacs fourty-one thousand only) was sanctioned as against the initial contract of Rs. 13,74,000. 00.
( 3 ) THE aforesaid resulted into an audit and ultimately an inquiry under Section 93 of the Act was ordered by the Director of Sugar, Gandhinagar as per the order dated 27-12-1989, and the period of inquiry was from 1-10-1984 to 30-9-1986. Initially Shri K. P. Pandya, District Registrar, Cooperative Societies (Sugar) at Surat was appointed as the Inquiry Officer and thereafter, since he was transferred, the charge was given to one Shri R. G. Pandya. Thereafter, Shri R. G. Pandya did not complete the inquiry and ultimately as per the order dated 12-12-1990 issued by the Director of Sugar one Shri K. H. Trivedi was appointed as the Inquiry Officer. It is the case of the petitioners that the earlier Inquiry Officer, Shri Pandya was of the view that the liability could not be fixed upon the office bearers and, therefore, they did not proceed with the inquiry. However, there is no material on record to show the said aspect except the bare averments and submissions made by the petitioners.
( 4 ) THE Inquiry Officer, Shri Trivedi ultimately held the inquiry and found that all the petitioners are liable for making payment of Rs. 36,250. 00 each to the society together with one Vasanji G. Patel, who was also member of the Executive Committee and in all the liability is fixed to Rs. 1,45,000. 00 and one Dilip S. Bhavsar was fastened with the liability of Rs. 10,08,504.
( 5 ) THE appeal No. 234/1991 was preferred by the Dilip S. Bhavsar, whereas appeals No. 235/1991 to 237/1991 were preferred by the petitioners and V. G. Patel. The petitioner of SCA No. 476/1993 preferred appeal No. 32/1992. All these appeals were heard before the Gujarat State Cooperative Tribunal at Ahmedabad. The learned Tribunal ultimately passed the common judgement and order dated 25-9-1992, whereby appeal No. 234/1991 preferred by Dilip S. Bhavsar, who was the Purchase Officer was allowed with the further direction by remanding the matter to the Inquiry Officer to re-inquire into the same case. The Tribunal, prima facie, observed that the conduct of the Managing Committee is also required to be inquired into and examined. However, so far as the appeals No. 235/1991 to 237/1991 qua the petitioners of SCA No. 305/1993 and 7113/1992 and one Mr. Vasanjibhai are concerned, the appeals were not accepted and the same were dismissed. The said judgement and award of t
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