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2020 Supreme(Guj) 793
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, J.
SHREE GANESH KHAND UDHYOG SAHKARI MANDALI LTD. - Appellant
Versus
STATE OF GUJARAT - Respondent
SPECIAL CIVIL APPLICATION NO. 7661 of 2020
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 7661 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 2 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 7661 of 2020
Decided On : 26-10-2020
For the Petitioner:MR DIPEN DESAI, ADVOCATE WITH MR HR PRAJAPATI
For the Respondent: MS MANISHA LAVKUMAR SHAH, GOVERNMENT PLEADER WITH MR KANVA ANTANI AND MS AISHWARYA GUPTA, ASST GOVERNMENT
Point of Law: As the amount involved is huge and the fine involved is also huge, if the petitioners have any satisfactory material to show that Kinjal Chemical was a projected person, wherein there was financial interest involved of any of the office-bearers of respondent No.4 or if the petitioners have any material to show that there was ex-facie callous approach on the part of respondent No.4 in supplying material at Rajasthan, which resulted into imposition of fine, they may approach before the competent authority under the Act.
Headnote:
Constitution of India - Article 226 - Gujarat Co-operative Societies Act, 1961 - Section 76(B), 71 and 86 – Inquiry by Registrar - Manufacturing process of sugar – amalgamation - Whether notice and order are in exercise of powers under Section 86(1) of Act or 86(2) of Act - Can notice be said to be pre-meditated and pre-judging the issue - Petition is not maintainable primarily on ground that it is a Society which has come and neither members of Committee or the Chairman in his individual capacity has challenged show cause notices - Therefore reliance placed on the decision in the case of Union of India vs. Kunisetty Satyanarayan., reported in (2006) 12 SCC 28, supports the case of the respondents.
Facts of the case: Petitioner is that it is a co-operative society engaged in manufacturing process of sugar - According to petitioner, it has about 17,416 members - Petitioner states that present Chairman, Shri Surjitsingh Mangrola has been in power and handles administration of Society since many years and Society under his chairmanship has successfully become financially strong - It is case of petitioner that in past, several complaints had been made and pursuant to such complaints, inquiries have been initiated, explanations have been sought and pursuant to reply being given, authorities have closed chapter of holding inquiries .
Findings of the court: Opinion of this Court, decision in case of Madan Kumar (supra) which reads as under indicate that at no stage of proceedings there was an interim relief restraining respondents from proceeding with issue - Moreover, looking to fact that tenure of Society was ending on 12.06.2020, and but for lock down and notification extending term to 30.06.2020, authorities were running against time - Had they not been able to complete exercise and but for further extension of tenure, term of present Society would have ended - It was incumbent for authorities, therefore to conduct and complete process by that date - It cannot therefore be said that authorities committed hot haste in considering issue on hand.
Result: Special Civil Application is dismissed.
JUDGMENT :
1. By way of this petition under Article 226 of the Constitution of India, the petitioner, M/s. Shri Ganesh Khand Udhyog Sahakari Mandali Ltd., has challenged the impugned order dated 11.06.2020, passed by the respondent No.1 in exercise of powers under Section 86 of the Gujarat Co-operative Societies Act, 1961. Pending the petition, amendments were carried out and the report dated 6.08.2020 and the notices dated 17.09.2020 and 18.09.2020 asking the petitioners to show cause under Section 76(B) and Section 71 of the Gujarat Co-Operative Societies Act are under challenge.
2. The facts in brief are as under :
2.1 The case of the petitioner is that it is a co-operative society engaged in the manufacturing process of sugar. According to the petitioner, it has about 17,416 members. The petitioner states that the present Chairman, Shri Surjitsingh Mangrola has been in power and handles the administration of the Society since many years and the Society under his chairmanship has successfully become financially strong. It is the case of the petitioner that in the past, several complaints had been made and pursuant to such complaints, inquiries have been initiated, explanations have been sought and pursuant to the reply being given, the authorities have closed the chapter of holding inquiries.
2.2 It is the case of the petitioner that in the year 2015, a PIL was also filed against the petitioner – Society by one Shri Chandubhai Maganbhai Vasava and Kanaksinh Harisinh Sangrod being Writ Petition (PIL) No. 49 of 2015. The Court considering the affidavit-in-reply disposed of the said petition.
2.3 It is the case of the petitioner that in respect of the same allegations, one Pushepndrasinh Indrasinh Sunva and others made a complaint on 30.06.2018 against the petitioner society. An inquiry was conducted on 07.06.2018. The petitioners were heard during the course of the proceedings on 29.10.2018. A show-cause notice was issued on 22.05.2020 directing the petitioner-Society to remain present for an opportunity of hearing under Section 86 of the Act. The petitioner- Society submitted its reply to the allegations made, and thereafter, the respondent No.1 has passed an order dated 11.06.2020 directing that an inquiry be conducted into the affairs of the Society under Section 86 of the Gujarat Co-Operative Societies Act (for short 'the Act').
2.4 That the order dated 11.06.2020 appointing an Inquiry Officer and conducting the inquiry was challenged before this Court in the present petition on 16.06.2020. For some or the other reasons beyond the control of the petitioner, the petition came to be adjourned. On such adjournments and during the pendency of the petition, the respondents prepared an ex-parte inquiry report dated 06.08.2020. Based on such a report, the respondent issued Show Cause Notice dated 17.09.2020, asking the petitioner-Society to show cause as to why proceedings under Section 71 of the Act should not be initiated. A subsequent notice was also issued on 18.09.2020 asking the petitioner as to why proceedings under Section 76(B)(1) and Section 76(B)(2) of the Act to remove the Chairman of the Society and disqualify him also should not be conducted. These proceedings, therefore, namely, the order directing inquiry dated 11.06.2020, the Inquiry Report dated 06.08.2020 and the Notices dated 17.09.2020 and 18.09.2020 are under challenge before this Court.
3. Mr.Dipen Desai, learned advocate for the petitioner-Society with Mr.Harshad Prajapati, learned advocate, made the following submissions:
(I) Mr.Dipen Desai, learned advocate, invited the attention of this Court to the show-cause notice dated 22.05.2020 issued by the Director of Sugar on 22.05.2020. He would submit that from the contents of the notice, it is evident that the show cause notice is pre-meditated. Reading the contents of the notice dated 22.05.2020, Mr.Desai, learned advocate, would submit that the inquiry which was to be held under Section 86 of the Act was already
