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2012 Supreme(Guj) 420

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
P.B. MAJMUDAR, MOHINDER PAL, JJ.
BRIJARAJSINH HEMANTSINH JADEJA
Versus
STATE OF GUJARAT & ANR.
LETTERS PATENT APPEAL No. 913 of 2011 (in Spl. C. A. No. 2177 of 2011) With L.P.A. No. 914 of 2011 (in Spl. C. A. No. 223 of 2011) With CIVIL APPLI. Nos. 12191 of 2011 (in L.P.A. No. 914 of 2011) With C. A. No. 12192 of 2011 (in L.P.A. No. 913 of 2011)
Decided On : 05/09/2012

Advocates Appeared:
LPA 913/2011
N.D. NANAVATI, Sr. Counsel with B.M. MANGUKIYA, MS. BELA A. PRAJAPATI for Appellant.
TUSHAR MEHTA, Addl. Advocate General with Ms. Krina Calla, A.G.P. for Respondent(s): 1 - 2.
LPA 914/2011
N.D. NANAVATI, Sr. Counsel with MR B.M. MANGUKIYA, MS. BELA A. PRAJAPATI for Appellant(s) : 1-3, 5-11
M.B. SHAIKH for Appellant No.4
TUSHAR MEHTA, Addl. Advocate General with Ms. Krina Calla, A.G.P. for Respondent(s): 1 – 3.
Respondent NO.4 -Notice unserved
Notice served to Respondent No.5 and 8
DEVANG VYAS for Respondent No.6 and 7

Headnote:

Gujarat Co-operative Societies Act, 1961 -Sections 80(3), 2(7A) and Chapter XI - National Bank for Agricultural and Rural Development Act, 1981 - Sections 2(u) and 2(v) - The said appellant was one of the elected Directors, who lost election to the post of Chairman in the Bank, which election was held and said appellant - original petitioner challenged the action of the State Government in nominating respondent No.2 on the ground that under Section 80(3) of the Act, the respondent No.2, i.e. Registrar, cannot act as a Member of the Board of Director of the Bank - Letters Patent Appeals is common, i.e. powers of State Government to send its representatives to the Board of Directors to the Gujarat State Cooperative Agriculture and Rural Development Bank, the learned Single Judge heard both the matters together and by the common judgment and order, dismissed both the petitions - Bank itself has not challenged the decision and the petitioners are the Directors and therefore, cannot challenge such decision which is accepted by the Bank - Appeal - Held, co-operative bank dealing in long-term loan facility is concerned, as on today, no decision is taken in this behalf and only decision is taken regarding co-operative bank dealing in short-term credit facilities for which tripartite agreement is arrived at, on the basis of which special procedure has been made regarding co-operative credit structure in connection with co-operative society or cooperative bank dealing in short-term loan facilities and those who are dealing in long-term loan facilities, formula is yet to be arrived at. It is an admitted fact that respondent No.6 bank is not covered under the co-operative credit structure as on today - State Government has been given power to send 3 representatives to the Board of Management of Gujarat State Co-operative Agricultural and Rural Development Bank and Bank does not fall under 'Co-operative Credit Structure' for which Section 80(3) has been incorporated - Therefore, Section 80(3) is not applicable to the Bank - - Appeal dismissed.

JUDGMENT

P.B.MAJMUDAR, J. - Both these Letters Patent Appeals are directed against the judgment and order delivered by the learned Single Judge in Special Civil Application No.223 of 2011 with Special Civil Application No.2177 of 2011. By the common impugned judgment and order, the learned Single Judge dismissed both the petitions by upholding right of the State Government to send representatives and nomination of the Registrar of the Cooperative Societies, on the board of the Gujarat State Cooperative Agriculture & Rural Development Bank Limited (for short ‘the Bank’) under Section 80(1) of the Gujarat Cooperative Societies Act, 1961 (for short ‘the Act’).

2. So far as appellant of Letters Patent Appeal No.913 of 2011 is concerned, the said appellant had filed Special Civil Application No.2177 of 2011 before the learned Single Judge. The said appellant was one of the elected Directors, who lost election to the post of Chairman in the Bank, which election was held on 17th January, 2011. In his petition, the said appellant - original petitioner challenged the action of the State Government in nominating respondent No.2 on the ground that under Section 80(3) of the Act, the respondent No.2, i.e. Registrar, cannot act as a Member of the Board of Director of the Bank. So far as appellants of Letters Patent Appeal No.914 of 2011 are concerned, they were original petitioners of Special Civil Application No.223 of 2011. The same has been filed by the elected members of the Board of Directors of the Bank. Since the main issue involved in both these Letters Patent Appeals is common, i.e. powers of State Government to send its representatives to the Board of Directors to the Gujarat State Cooperative Agriculture and Rural Development Bank, the learned Single Judge heard both the matters together and by the common judgment and order, dismissed both the petitions. The learned Single Judge held that since the State Government stood as guarantor, it has a right to send its representatives in the management of the Bank under Section 80 (1) of the Act. The learned Single Judge also found that at the instance of the petitioner, petitions are not maintainable as the Bank itself has not challenged the decision and the petitioners are the Directors and therefore, cannot challenge such decision which is accepted by the Bank.

So far as petitioner of Special Civil Application No.2177 of 2011 is concerned, he had raised additional point before the learned Single Judge that the Registrar could not have acted as a Member of the Bank. The said point was also negatived by the learned Single Judge. The aforesaid decision of the learned Single Judge is challenged in the present appeals by the original writ petitioners.

3. Learned Senior Counsel Mr. N.D. Nanavati appearing with learned counsel, Mr.Mangukiya on behalf of the appellants - original petitioners argued that since the State Government has not subscribed to the share capital to the Bank i.e. Gujarat State Cooperative Agriculture and Rural Development Bank under the provisions of Section 80(3) of the Act, the State Government cannot send more than one nominee. In the instant case, since there are three nominees sent by the State Government, the said action is, therefore, violative of Section 80(3) of the Act. It is also argued by Mr.Nanavati that simply because the State Government stood as guarantor, it is not a ground for coming to the conclusion that inspite of clear language of Section 80(3) of the Act, the State Government is entitled to send its representative ignoring the mandate of Section 80(3) of the Act. It is submitted that when the State Government has not subscribed to the share capital, the Government is not entitled to send more than one representative as per Section 80(3) of the Act and Section 80(1) of the Act will have not application. The only argument, which is raised by the learned Senior Counsel for the appellants before us is that, the State Government has no power to send mo












































































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