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2006 Supreme(Guj) 414
Gujarat High Court
Judgename :AKIL KURESHI
AHMEDABAD DISTRICT CO-OP PURCHASE AND SALE UNION LTD - Appellant
Versus
GUJARAT STATE CO-OP BANK LTD - Respondent
SPECIAL CIVIL APPLICATION 4956 Of 2005
Decided On : 07/19/2006
Headnote:Point in Issue :
Whether cooption of members in the Managing Committee of Specified Co-operative Societies is contrary to provisions of the Act.
Head Note :
(a) Gujarat Co-operative Societies Act, 1961 (Guj. Act 10 of 1962) - Chapter XI-A, Sections 74-C, 82 and 160 - Constitution of India, 1950 - Articles 12 and 226 - Specified co-operative society - Managing committee - Membership by cooption - Challenge to - Petition for - Maintainability - It is true that no foundation is laid in petition to hold that Respondent No. 1 to 4 are State within the meaning of Article 12 of the Constitution but it could not be denied that by virtue of the areas and the importance of activities societies have achieved considerable importance and they are governed by special provisions made in the Act - Court specifically referring Section 74-C and Chapter XI-A observed that it is no longer a matter of contract between parties as alleged - The legislature has intercepted and made detail provisions to ensure election of committees free and fair - Co-operative societies are created by statute and are governed and controlled by statute - Therefore, jurisdiction of High Court can be invoked as a public Law remedy for fulfillment of public duty and obligation contemplated under the Act - That apart Respondents No. 5 to 6 Registrar of Co-operative Societies and Department of the State Government are official respondent and under the provisions of the Act they are required to see that provisions in the Act are implemented - The prayers made by petitioner includes directions to Respondents 5 and 6 to ensure provisions are properly implemented - Such directions are not out of the purview of writ jurisdiction of the Court - Petition can not, therefore, be rejected merely on ground of non-maintainability.
Held :
"In the cases before Court are concerned with co-operative societies which from the inception are governed by statute. They are created by statute, they are controlled by statute and so, there can be no objection to statutory interference with their composition on the ground of contravention of the individual right of freedom of association". It can thus be seen that such societies hold considerable importance in so far its constitution and management is concerned. It is in this regard, that the provisions contained in Section 74-C(3) provide that notwithstanding anything contained in the bye-laws of any such society, the committee of management shall be elected by the general body of members of the society and all other committees authorized by or under the bye-laws may be constituted by electing or appointing persons from among the persons who are members of the committee of management. In the present petition, the petitioner has sought implementation of the said statutory provision.
[Para 14.1]
There is yet another aspect of this issue. Respondent Nos. 5 & 6 are the official respondents, i.e., the Registrar of Co-operative Societies and the Department of the State Government who are entrusted with the duty of ensuring that the provisions contained in the said Act are implemented and corresponding powers are also available with the authorities particularly in Section 82 and Section 160 of the said Act. [Para 15]
Under Section 82 of the said Act, the Registrar has power to enforce performance of obligation of a society. It provides, inter alia, that where any society is required to take any action under the Act, the rules or the bye-laws and such action is not taken within the time provided in the Act or Rules or the Bye-laws or where no such time is provided, within such time as the Registrar may specify by notice in writing, the Registrar may himself or through a person authorized by him, take such action at the expense of the society. Under the provisions of Section 160 of the said Act, the Registrar enjoys certain powers to give directions to the co-operative societies. The prayers made by the petitioner also include prayers for direction to Respondent Nos. 5 & 6 to ensure that the provisions contained in Section 74-C particularly Sub-section (3) thereof are properly implemented. Surely, such directions are not out of the purview of writ jurisdiction of this Court under Article 226 of the Constitution of India. Merely on the ground of maintainability, Court does not find that this petition can be rejected.
[Para 15.1]
Head Note :
(b) Judgment - As per incuriam - Concept of - Applicability - Indicated.
Held :
The concept of per incuriam would apply where a decision has been rendered in ignorance of a binding decision on the same issue from the same Court or from the higher Court or where the judgment has been rendered without noticing the statutory provisions applicable.
[Para 17]
Head Note :
(c) Gujarat Co-operative Societies Act, 1961 (Guj Act 10 of 1962) - Sections 73, 74-B, 74-C and 74-C(3) - Specified Co-operative Society - Managing Committee - Member of Committee - Entry by co-option - Permissive bye-laws - Validity - Finding of - Court has already decided in AMP Co-operative Society that in view of the provisions contained in Section 74-C(3) of the Act not withstanding anything contrary to the provisions contained in the bye-laws it is not open for a Specified Co-operative Society to nominate any members to the Managing Committee and the only mode for constitution of Managing Committee would be through election - Court held, that on the principle of judicial precedence it is bound by the said decision - Also independently Court held, that it does not find any reason to take a different view since it also comes to the same legal conclusions - There is, therefore, no case for any reference to larger bend - Court, therefore, allowed the petition with directions indicated therein.
Held :
The Single Judge of this Court in the case of A.M.P.Co.op. Soc. has already come to the conclusion that in view of the provisions contained in Section 74-C(3) of the said Act, notwithstanding anything contrary to the provisions contained in the bye-laws, it is not open for a specified co-operative society to nominate any member to the managing committee and the only mode for constitution of the managing committee of such societies would be through election. Ordinarily, as a coordinate bench, Court be bound by the ratio laid down by the Single Judge of this Court and would have followed the ratio and given directions as found appropriate in the facts of the present case. [Para 16.1]
In conclusion, quite apart from the fact that on the principle of judicial precedence Court is bound by the decision of the Single Judge, independently also, there is no reason to take a different view since Court also come to the same legal conclusions. There is, therefore, no case for reference to a Larger Bench made out. [Para 31]
Court finds that the petition is required to be allowed. The following directions are therefore given:-
(a) It is provided that the managing committee of Respondent Nos. 1 to 4 societies are not competent to co-opt any member in such committee and current co-option is held to be illegal and unlawful.
(b) Any members who are co-opted members of the managing committee of these societies shall cease to enjoy such membership forthwith.
(c) Managing committees of Respondent Nos. 1 to 4 shall not make nominations of any co-opted members to the committee in future also.
(d) Respondent Nos. 5 & 6 shall ensure that these directions are properly complied with so far as the above mentioned societies are concerned. [Para 32]
Law Laid Down :
Only mode of constitution of the Managing Committee would be through election.
Case Law Analysis :
AMP Co-op. Society vs. S.K. Distt. Coop. Milk Producers Union Ltd., 2004 (1) GLR 310 [Para 3];; Amreli Distt. Co-op. Sale and Purchase Union vs. State, 25 (2) GLR 1244 [Para 7];; A.M. Bhutaiya vs. Amreli Distt. Central Co-op Bank, 1998 (2) GLR 1470 [Para 7.4];; Zee Tele Films Ltd vs. Union of India, AIR 2005 SC 2677 [Para 8.8];; Daman Singh vs. State of Punjab, 1985 (2) SCC 670 [Para 14.1].- Relied on
Rajabhai vs. Member U.T.S.K.V.S. Ltd., 1976 GLR 583 [Para 8.3];; Lambha S.S.M. vs. D.R. Co-op. Societies, Ahmedabad, 1973 GLR 786 [Para 8.3];; Dharam Dutt vs. Union of India, 2004 (1) SCC 712 [Para 30].-Dissented
Conclusion :
It is not open for a Specified Co-operative Society to nominate any member to the Managing Committee and the only mode of constitution of Managing Committee would be through election.
Cases Referred :
Zoroastrian Co-op. Housing Society Ltd. vs. District Registrar, Co-op. Societies (Urban), 2005 (5) SCC 632;; Govt. of A.P. vs. B. Satyanarayana Rao, 2000 (4) SCC 262;; Dy. C.S.T. vs. Thomas Stephen & Co. Ltd., 1988 (2) SCC 260;; State of U.P. vs. Synthetics and Chemicals Ltd., 1991 (4) SCC 139;; Sultana Begum vs. Prem Chand Jain, 1997 (1) SCC 373;;Datar Switchgears Ltd. vs. Tata Finance Ltd., 2000 (8) SCC 151;; Director of Settlements, A.P. vs. Mr. R. Apparao, 2002 (4) SCC 638;; C.K. Uplana vs. Dy. Collector, 2005 (3) GLR 2672;; N.N. Patel vs. A.B. Gor, 2005 (2) GLR 1583;; Jain Merchants Co-operative Housing Society Ltd. vs. HUF of Manubhai Shah, 1995 (1) GLR 19;; Shin-etsu Chemical Co. Ltd. vs. Aksh Optifibre Ltd., 2005 (7) SCC 234;; Monrovia, Bermuda vs. Orient Middle East Lines Ltd., Saudi Arabia And Ors., 1995 Supp (2) SCC 280 at 286;; State of Bihar vs. Bihar Rajya M.S.E.S.K.K. Mahasangh, 2005 (9) SCC 129;; Ali M.K. vs. State of Kerala, AIR 2003 SC 4006;; Mullins vs. Treasurer of Survey, 1880 (5) QBD 170;; Shah Bhojraj Kuverji Oil Mills and Ginning Factory vs. Subhash Chandra Yograj Sinha, AIR 1961 SC 1596;; Calcutta Tramways Co. Ltd. vs. Corporation of Calcutta, AIR 1965 SC 1728;; West Derby Union vs. Metropolitan Life Assurance Co., 1897 AC 647, (HL);; A.N. Sehgal & Ors. vs. Raje Ram Sheoram & Ors., AIR 1991 SC 1406;; Tribhovandas Haribhai Tamboli vs. Gujarat Revenue Tribunal & Ors., AIR 1991 SC 1538;; Kerala State Housing Board & Ors. vs. Ramapriya Hotels (P) Ltd. & Ors., 1994 (5) SCC 672 = 1994 AIR SCW 3297.
Decided in Favour of :
Petitioner
Petition Allowed
Rule is Made Absolute
( 2 ) THE petitioner is a cooperative society registered under the Gujarat Cooperative Societies Act. It is a district level cooperative society having area of operation in the whole district of Ahmedabad. The petitioner also happens to be a specified cooperative society under section 74-C of the said Act. The petitioner, in turn, is a member of several cooperative societies including respondent No. 1 to 4 co-operative societies. These respondents i. e. respondent Nos. 1 to 4 are also specified co-operative societies. It is the case of the petitioner that being specified societies, elections to the Managing Committee of these societies are required to be held as provided in section 74c of the said Act. It is the primary contention of the petitioner that in view of the provisions contained in sub-section (3) of section 74c of the said Act, the Managing Committee of the society can be constituted only through election and by no other mode. It is the case of the petitioner and to which there is no series dispute raised by the respondents that respondents Nos. 1 to 4 have been nominating members in the Managing Committee of the society through co-option. Through different bye-laws framed by the respective societies, such power of cooption has been granted to the Committee itself. It is this mode of nominating members to the Committee through cooption by the Committee itself which the petitioner objects to on the ground that the same is impermissible in view of the provisions of section 74c (3) of the said Act.
( 3 ) THE petitioner relies on the decision of the learned single Judge of this Court in the case of A. M. P. Co-op. Society v. S. K. Dist. Coop Milk Producers Union Ltd. , 2004 (1) GLR 310. In the said decision, learned single Judge of this Court had come to the conclusion that bye-laws framed by the society cannot prevail over the provisions contained in sections 74b and 74c of the said Act. It was held that the provisions made under bye-laws for cooption of three women representatives as members of the Managing Committee are in contravention of the provisions contained in section 74c (3) of the said Act.
( 4 ) ON the other hand, the case of respondents Nos. 1 to 4 i. e. the specified cooperative societies as well as other individual private respondents who are members of such societies through co-option is that the bye-laws of the societies permit such cooption and that it is always open for the societies to evolve its own mode for constitution of the Managing Committee of the society. It is primarily contended that section 74-C (3) of the said Act does not prohibit any such provision contained in the bye-laws of the society.
( 5 ) BEFORE adverting to the legal controversies, it may be noted that there is no dispute about the fact that the petitioner herein is a member of respondents Nos. 1 to 4 societies. Respondents Nos. 1 to 4 societies are specified cooperative societies. Elections to the Managing Committee of such societies are governed by the provisions contained in section 74c and Chapter XI-A of the said Act. It is also not in dispute that in so far as the bye-laws of these societies are concerned, they provide for cooption of certain number of members to the Managing Committee. In case of respondent No. 1 society, bye-law No. 26 provides, inter alia, that the Board may co-opt not more than two Directors. Bye-law 39 (H) of respondent No. 2 society also provides for cooption of two members by the Managing Committee. Bye-laws of the respondent No. 3 cooperative soc
