(PER : HONOURABLE THE CHIEF JUSTICE MR. BHASKAR BHATTACHARYA)

1. This Letters Patent Appeal has been referred to the Larger Bench by a Division Bench (C.K.Thakkar & S.D.Pandit, JJ.) by order dated 2nd July 1997 in view of the conflicting decisions of two Division Benches of this Court, one, in the case of Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. Vs. State of Gujarat, reported in 1984 (2) GLR 1244 and the other, in the case of Jain Merchant Cooperative Housing Society Ltd. & Ors. Vs. HUF of Manubhai Kalyanbhai Shah, reported in 1995 (1) GLR 19.

2. The question that falls for determination in this Larger Bench is as under:

“Whether in view of the subsequent decision of the Supreme Court in the case of Daman Singh Vs. State of Punjab, reported in AIR 1985 SC 973, the decision in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra) is good law.”

3. The facts giving rise to the filing of the Special Civil Application, out of which the present Reference arises, may be summed up thus:-

3.1 The appellant before us, a Co-operative Society registered under the Gujarat Cooperative Societies Act [ “the Act” for short], filed a suit being Arbitration Suit No.2134 of 1995 against the allottees of plot No.10 in the appellant-society before the Board of Nominee at Ahmedabad and at the same time, prayed for an interim injunction, restraining the respondents No.2, 3 and 4 from transferring or alienating the property and also for a direction upon respondents No.2, 3 and 4 to transfer their interest in favour of the society itself. While such Arbitration Suit No.2134 of 1995 was pending, the respondents No. 2, 3 and 4, on the other hand, filed an application under Section 24 of the Act before the Respondent No.1 thereby praying for the relief in terms of that Section. The appellant entered appearance in the said proceedings and contested the same and at the same time, filed a separate application for stay of further proceedings of the said application under Section 24 of the Act on the ground that in view of pendency of the Arbitration Suit, the parallel proceedings should not continue.

3.2 The respondent No.1 rejected the prayer for stay.

3.3 Being dissatisfied, the appellant-society came up with the Special Civil Application challenging the order of the Respondent No.1 refusing the prayer for stay.

3.4 The learned Single Judge, as it appears from the order which is the subject-matter of challenge of the Letters Patent Appeal, rejected such application.

3.5 Being dissatisfied, the appellant preferred this Letters Patent Appeal, thereby contending that the learned Single Judge erred in law in not following the decision of the Division Bench of this Court in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra), inasmuch as, in the said decision of the Division Bench, the provision contained in Section 24 of the Act has been held to be ultra vires and such being the position, there was no necessity of continuing the proceedings under Section 24 of the Act.

3.6 As indicated earlier, when the Letters Patent Appeal came up before the Division Bench, the Division Bench, in view of the conflicting decisions indicated earlier, referred this matter to a larger bench.

4. Therefore, the question which principally arises for determination before us is whether the observations of the Division Bench of this Court in the case of Amreli District Co-Operative Sale & Purchase Union Ltd. & Ors. [supra] in paragraph 55 of the judgment that Section 24[1] & [2] of the Act is violative of Article 19[1] [c] of the Constitution of India are correct or not and consequently, whether the subsequent provisions of sub-sections [3], [4], [5] & [6] of Section 24 of the Act would fail if the main provision is held to be suffering from infirmity.

5. In order to appreciate the aforesaid contention, it will be appropriate to refer to the provisions contained in Sections 2[13], 2[19], 22, 24, 30 of the