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2016 Supreme(Guj) 1598

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R. Subhash Reddy and V.M. Pancholi, JJ.
Kuvrabhai Bharabhai Bharvad - Appellants
Vs.
State of Gujarat and Ors. - Respondent
Letters Patent Appeal No. 644 of 2016 in Civil Application No. 597 of 2016 in Special Civil Application No. 268 of 2015 and Civil Application No. 6694 of 2016
Decided On : 10-08-2016

Advocates Appeared:
For the Appellant :B.S. Patel and Keyur A. Vyas, Advocates
For the Respondents:Natvar D. Bharwad, Advocate

The main legal point established in the judgment is that a member of a cooperative society, at whose instance powers are exercised by the authorities and against whom specific allegations are made, can be considered a necessary and proper party to the proceedings, and therefore, should be joined as a party respondent.

Headnote:

Joining Party - Gujarat Cooperatives Societies Act, 1961 - Section 84(5) - The court discussed the provisions of section 84(5) of the Gujarat Cooperatives Societies Act, 1961 and the legal principles related to necessary and proper party. The court highlighted the appellant's right to be joined as a party respondent in the proceedings and set aside the order of the learned Single Judge.

Fact of the Case:

The appellant sought to challenge the order rejecting his application for joining as a party respondent in a petition filed by respondent No. 4. The appellant, a member of the society, had requested re-audit of the society's accounts for the year 2012-13 due to irregularities and illegalities found. The respondent authorities appointed a special auditor for re-audit based on the appellant's application under section 84(5) of the Act, 1961. The original petitioner made allegations against the appellant but did not join him as a party respondent.

Finding of the Court:

The court found that the appellant, being a member of the society and at whose instance the powers were exercised by the respondent authorities, was a necessary and proper party to the proceedings. The court set aside the order of the learned Single Judge and ordered the appellant to be joined as a party respondent in the petition.

Issues: The main issue was whether the appellant had the right to be joined as a party respondent in the petition challenging the appointment of a special auditor for re-audit.

Ratio Decidendi: The court held that the appellant, as a member of the society and at whose instance the powers were exercised, was a necessary and proper party to the proceedings, and therefore, should be joined as a party respondent.

Final Decision: The court set aside the order of the learned Single Judge and ordered the appellant to be joined as a party respondent in the petition. The appeal was allowed with no order as to costs.

JUDGMENT :

V.M. Pancholi, J.

1. By way of this appeal which is filed under Clause of 15 of the Letters Patent, the appellant - applicant seeks to challenge the order dated 14/07/2016 passed by the learned Single Judge in Civil Application (For joining party) No. 597 of 2016.

2. Present respondent No. 4 - Shri Uchvan Gopalak Dudh Utpadak Sahakari Mandli Limited has filed Special Civil Application No. 268 of 2015, wherein, respondent No. 4 - original petitioner has challenged the order dated 17/11/2014 passed by the Special Auditor (Milk), Surat. Said petition is pending for hearing and disposal. In the said petition, Civil Application No. 597 of 2016 was filed by the present appellant for impleading him as party respondent. Learned Single Judge by impugned order dated 14/07/2016 rejected the said application. Hence, the appeal is filed by the present appellant.

3. Heard learned advocate Shri B.S. Patel with learned advocate Shri Keyur Vyas for the appellant and learned Senior advocate Mr. D.C. Dave with learned advocate Mr. Shivang Shukla for respondent No. 4.

4. Learned advocate Shri B.S. Patel submitted that the appellant submitted application before the respondent State authorities wherein, he requested for re-audit of books of accounts for the year 2012-13 of respondent No. 4 - society. Respondent authorities informed the appellant to deposit a sum of Rs. 52,000/- in the Treasury of Audit Department, Surat for necessary fees for re-audit. Accordingly, the appellant paid sum of Rs. 52,000/-. Learned advocate submitted that though audit was carried out in the year 2012-13, certain irregularities were found and as a member of respondent No. 4 - society, the appellant was interested for proper functioning of said society. As irregularities and illegalities were found, the appellant was compelled to submit such application. The respondent authorities thereafter, appointed auditor for the purpose of re-audit on the basis of application submitted by the appellant under section 84(5) of the Gujarat Cooperatives Societies Act, 1961 (for short "the Act, 1961"). Respondent No. 4 - original petitioner has challenged the order of appointment of auditor for the purpose of re-audit by filing aforesaid petition in which respondent No. 4 has made certain allegations against present appellant in ground No. (B), (D) and (F) of the petition. At this stage, it is submitted that when the name of appellant is referred in the petition and certain specific allegations are leveled against the appellant, it was duty of respondent No. 4 - original petitioner to implead the appellant as party respondent in the petition. In fact, the appellant is necessary and proper party as well as affected party. Hence, it was duty of original petitioner to join the appellant herein as party respondent in the said proceedings. However, when the appellant came to know about the pendency of the petition, he filed aforesaid Civil Application for joining him as party respondent. However, the said application is wrongly dismissed by the learned Single Judge and therefore, present appeal is filed. Mr. Patel submitted that in the facts and circumstances of the present case when the appellant is affected party and/or necessary and proper party to the proceedings, necessary directions be issued for impleading the appellant as party respondent in the aforesaid petition.

5. On the other hand, learned Senior advocate Shri D.C. Dave appearing for respondent No. 4 - society opposed the request made by the appellant. It is contended that the appellant who is member of the respondent No. 4 - society has no legal right to become a party in the main petition. In the petition though name of the appellant is referred, no relief is prayed for against the appellant. Respondent No. 4 - original petitioner has prayed for quashing and setting aside the order of appointment of auditor for the purpose of re-audit. It is urged that merely because on the application submitted by the appellant before t


















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