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Satpal Dharamdas Patel v. The Jetpur Group Vividh Karyakari Seva Sahkari Mandli Ltd

Satpal Dharamdas Patel v. The Jetpur Group Vividh Karyakari Seva Sahkari Mandli Ltd

(High Court Of Gujarat At Ahmedabad)

R/SPECIAL CIVIL APPLICATION NO. 11194 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 11197 of 2022 | 10-07-2023

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr.V.C.Vaghela for the petitioners in Special Civil Application No.11194 of 2022, learned advocate Mr.Dipen Desai for the petitioners in Special Civil Application No.11197 of 2022, learned advocate Mr.Baiju Joshi for the respondent-Society who filed the Lavad Suit No.134 of 2022 in Special Civil Application No.11194 of 2022, learned advocate Mr.B.T.Rao for the respondent-Society who filed the Lavad Suit No.133 of 2022, learned Senior Advocate Mr.B.S.Patel with learned advocate Mr.Chirag B. Patel for the Gujarat State Co-operative Marketing Societies Limited (for short ‘Federation’), learned advocate Mr.Saurabh Amin for the respondent No.5 in Special Civil Application No.11194 of 2022, learned advocate Mr.Hriday Buch for respondent No.5 in Special Civil Application No.11197 of 2022 who are declared elected in the result declared by the Election Officer in the constituency of Chhota Udepur and Kheda respectively learned Assistant Government Pleader Mr.Aayan Patel for the respondentState.

2. Rule, returnable forthwith. Learned advocate Mr.Baiju Joshi, learned advocate Mr.B.T.Rao, learned advocate Mr.Chirag B. Patel, learned advocate Mr.Saurabh Amin and learned advocate Mr.Hriday Buch for the respective respondents waive service of notice of rule.

3. The petitioners are the Co-operative Societies registered under the Gujarat Cooperative Societies Act, 1961 (for short ‘the Act, 1961’).

3.1. The petitioner No.1 is trader who has filed his nomination from Chhota-Udepur Constituency for contesting the election of respondent No.2- Federaation. The petitionersSocieties are engaged in the purchase and sale of agricultural produce. Therefore, petitioners-Societies applied to be members of the respondent No.2- Federation. The respondent No.2-Federation having found the petitioners-Societies qualified to be enrolled as members, admitted the petitioners-Societies as members on 25th March, 2021. The Federation is an apex level Society which is also a specified Society under Section 74(C) of the Act, 1961. The elections are being conducted by the respondents-Election Officer, Deputy Collector and City Deputy Collector, Ahmedabad.

3.2. As the term of the Managing Committee of the Federation was expiring in the month of July, 2022, voters list was prepared by the Federation and forwarded to the Election Officer for preparation of the final voters list. The Election Officer declared the preliminary voters list on 16.05.2022 and thereafter, final voters list after the hearing the objections was finalised on 20.05.2022. Election program was declared on 23.05.2022 and nominations were to be filed from 25.05.2022 to 1st June, 2022. The scrutiny of nomination was to be held on 3rd June, 2022 and the list of final contesting candidates was to be declared on 8th June, 2022 and voting if necessary to be held on 19th June, 2022.

3.3. It is the case of the petitioners that just one day before the date of the election to be held on 19th June, 2022, i.e. on 18th June, 2022, the respondent No.1 in Special Civil Application No.11194 of 2022 and respondent No.4 in Special Civil Application No.11197 of 2022 filed Lavad Suit Nos.133 of 2022 and 134 of 2022 before the Board of Nominees with a prayer to restrain the petitioners from functioning as members of the Federation.

3.4. The Board of Nominees, Ahmedabad vide impugned order dated 18th June, 2022,Saturday, granted stay restraining the petitioners from exercise of any membership right of the Federation and accordingly, the petitioners were denied from exercising their rights to vote in the election held on 19th June, 2022.

3.5. It is the case of the petitioners that notices containing the operative order were provided to the petitioners at the time when the petitioners went to vote in the election and the petitioners were restrained from voting by the Election Officer.

3.6. It is the case of the petitioners that as soon as the Election Officer restrained the petitioners from voting, the petitioners filed this petition challenging the action of the Federation and as it was a Sunday, the permission was granted to circulate this petition for 20.05.2022, Monday, at 11 AM. The petitioners therefore had given an application for not to declare the result but the Election Officer did not accept the application and declared the result and the respondent No.5-Shrimati Naynaben Dipeshkumar Shah in Special Civil Application No.11194 of 2022 and Mr.Maheshbhai Punambhai Patel in Special Civil Application No.11197 of 2022 were declared elected. It is the case of the petitioners that if the petitioners-Societies were allowed to vote, the respondent No.5 would have lost.

3.7. The Board of Nominees was served with a notice issued by this Court, however, during pendency of this petition, the Board of Nominees proceeded with the final hearing of the interim injunction application-Exh-6 in Lavad case No.134 of 2022 and passed the order dated 09.09.202 granting interim prayers which are in effect the final prayers prayed by the plaintiffs before the Board of Nominees in the Lavad Suits and thus, practically allowed the Lavad Suits. The Board of Nominees without taking into cognizance the pending proceedings before this Court, passed the order dated 09.09.2022 below Exh-6 in Lavad Suit Nos.134 of 2022 whereas, the hearing of the application for interim injunction in Lavad Case No.133 of 2022 was adjourned.

3.8. The petitioners therefore amended the Special Civil Application No.11194 of 2022 and also amended Special Civil Application No.11197 of 2022 raising the issue of maintainability of Lavad Cases filed before the Board of Nominees and further prayed to quash and set aside the election result dated 19th June, 2022 declared by the Election Officer and after allowing the petitioners to vote, declare the result afresh. The petitioners have also prayed to quash and set aside the order dated 09.09.2022 passed by the Board of Nominees in Lavad Suit No.134 of 2022.

4. Learned advocate Mr.V.C.Vaghela for the petitioners in Special Civil Application No.11194 of 2022 submitted that Lavad Suit No.134 of 2022 filed by the Jetpur Group Vividh Karyakari Seva Sahakari Mandali Limited under Section 96 of the Act, 1961 is not maintainable before the Board of Nominees whereby, the prayer is made to restrain the petitioners to exercise their rights as members of the Federation. It was submitted that the Board of Nominees without following the principles of natural justice and without giving an opportunity of hearing has passed ex-parte order of stay against the petitioners on 18th June, 2022 which was a Saturday in undue haste.

4.1. It was submitted that the impugned order which was passed granting ad-interim relief was in nature of final relief whereby, the petitioners are restrained from functioning as members of the Federation.

4.2. It was submitted that as per the provisions of Sections 22 and 23 of the Act, 1961, the Board of Nominees would not have any jurisdiction to entertain the Lavad Suit as Sections 22 of the Act, 1961 provides for persons who may become members whereas, Section 23 of the Act, 1961 provides for removal from membership in certain circumstances which would not fall within the purview of Section 96 of the Act, 1961 which provides for disputes which can be agitated before the Board of Nominees.

4.3. It was submitted that it is for the Federation to admit the petitioners as members or reject his application for admission as members and provisions of Section 22(2A) of the Act, 1961 provides for Appeal against the order of admission as members or rejection for non-admission as members. It was therefore submitted Lavad Suit under Section 96 of the Act, 1961 is not maintainable because any dispute with regard to the membership of a Society can be decided under Sections 22 to 24 of the Act, 1961 and specific provisions are made with regard to the admission or removal of the members along with an Appeal against such orders to be preferred before the Registrar, Co-operative Societies.

4.4. It was submitted by learned advocate Mr.V.C.Vaghela that on bare perusal of Section 96 of the Act, 1961, it nowhere provides that the dispute with regard to the admission of a member can be decided by Board of Nominees, inas much as Section 96 of the Act, 1961 specifically provides for the disputes which can be decided by the Board of Nominees. It was therefore submitted that the prayers made in the Lavad Suits do not fall within jurisdictions of Board of Nominees and the impugned orders passed by the Board of Nominees are without jurisdiction and therefore the petitioners have challenged the same by invoking extra-ordinary jurisdiction under Article 226 of the Constitution of India by preferring these petitions.

4.5. It was submitted that the plaintiffs before the Board of Nominees have no locus standi as it cannot be said to be an aggrieved person to file a Suit challenging the legality and validity of the admission of the petitioners as members of the Federation.

4.6. It was submitted that the admission of the petitioners as members has been approved in the Annual General Meeting of the Federation and no objection was raised by the private respondents and therefore, by filing a Lavad Suit, the respondents could not have obtained an order to restrain the petitioners from voting in the election.

4.7. It was submitted that no objection was raised when the final voters list was published by the Election Officer nor any objection was raised when the nominations were filed by the representative of the petitioners-Societies. It was submitted that the Board of Nominees could not have passed the impugned interim orders restraining the petitioners to discharge the function as members of the Federation at mid-night of 18th June, 2022 and moreover, could not have decided the application for interim relief finally during the pendency of these petitions granting the reliefs prayed in the main Lavad Suits without prima-facie holding that the petitioners have submitted false documents being the members of the Federation.

4.8. It was submitted that the findings given by the Board of Nominees are one sided and without authority of law and in spite of the fact that the Federation had taken an objection with regard to the maintainability of the Suit, but the same was not considered by the Board of Nominees.

4.9. It was submitted by learned advocate Mr.V.C.Vaghela that if the petitioners have become members of the Federation by producing false and forged documents, the petitioners can be removed as members under the provisions of Section 36 of the Act, 1961.

4.10. It was submitted that the Board of Nominees has failed to consider the ingredients for granting interim relief as provided under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 inas much as, the plaintiffs before the Board of Nominees failed to show as to what inconvenience would be caused and what loss would be incurred which cannot be compensated in terms of money if the interim relief is not granted. It was further submitted that the plaintiffs have also failed to show that the prima-facie case in their favour and despite, the Board of Nominees relying on the statements made in an application for interim injunction, passed the impugned order which is final in nature.

4.11. Learned advocate Mr.V.C.Vaghela invited the attention of the Court to the interim reliefs prayed by the plaintiffs in the application for injunction and compared the same with the final reliefs prayed in the Lavad Suits to submit that the impugned orders passed by the Board of Nominees are in nature of final relief.

4.12. It was submitted that the Board of Nominees has thus exceeded its jurisdiction vested in it under Section 96 of the Act, 1961 by passing the impugned orders without authority of law. It was therefore prayed that the impugned orders along with the Lavad Suits are required to be quashed and set aside as the impugned orders are passed by the Board of Nominees apparently under political pressure.

4.13. It was further submitted that the Election Officer could not have restrained the petitioners from voting as members of the Federation as their names appeared in the final voters list and once the final voters list is prepared, the Election Officer becomes ex-officio defunct and has no power to delete the names from the voters list. It was therefore submitted that the action of the Election Officer in not allowing the petitioners to vote on the basis of the orders passed by the Board of Nominees is also required to be quashed and set aside.

4.14. It was submitted by learned advocate Mr.V.C.Vaghela that as the Lavad Suit filed before the Board of Nominees is not maintainable, the order passed below Exh-6 granting interim-injunction restraining the petitioners to function as members of the Federation would also not survive.

4.15. In support of his submissions, learned advocate Mr.V.C.Vaghela referred to and relied upon the Judgment dated 13th October, 2022 passed by the Apex Court in case of The Bengal Secretariat Cooperative Land Mortgage Bank And Housing Society Ltd. Versus Sri Aloke Kumar reported in 2000 (0) AIJEL-SC 69976. It was submitted that another Lavad Suit No.132 of 2022 was also filed before the Board of Nominees wherein, similar order was passed on 18th June, 2022 and Special Civil Application No.11196 of 2022 was filed but the same was not pressed as the election did not take place as only one candidate was declared uncontested from the constituency.

5. Learned advocate Mr.Dipen Desai for the petitioners in Special Civil Application No.11197 of 2022 adopted the arguments and submissions of learned advocate Mr.V.C.Vaghela and in support of such submissions, he referred to and relied upon the following decisions of this Court as well as the Apex Court:

"(1) Benedict Denis Kinny Versus Tulip Brian Miranda with Prachi Prasad Parab Versus State of Maharashtra reported in AIR 2020 SC 3050.

(2) Magadh Sugar & Energy Ltd. Versus State of Bihar reported in (2021) 11 Scale 350.

(3) Election Commission of India versus Ashok Kumar and Others reported in 2000 (8) SCC 216 [LQ/SC/2000/1287] .

(4) Ishwarbhai Narayanbhai Patel versus State of Gujarat reported in 2021 JX (Guj) 624.

(5) Mahendra Maganbhai Patel versus State of Gujarat reported in 2014 JX (Guj) 62.

(6) Shrutbandhu H. Popat versus State of Gujarat reported in 2007 (3) GLR 1942.

(7) State of U.P. and Others versus Ram Sukhi Devi reported in (2005) 9 SCC 733 [LQ/SC/2004/1156] .

(8) Sardarkunj Co-operative Housing Society Limited and Others Versus Ramabhai Jethabhai Patel and Others reported in 1984 GLH 1059. [LQ/GujHC/1984/178]

(9) Maganbhai Khanabhai Nandodaria versus Vandematram Co-operative Society Limited reported in 2003 (3) GLH 482.

(10) Vasantbhai Vadilal Joshi versus Laxmikuvar Virendrasinh Parmar rendered on 27.09.2021 in Special Civil Application No.7941 of 2021.

(11) ZOROASTRIAN Co-operative Housing Society Limited versus District Registrar, Cooperative Societies (Urban) reported in 2005 (5) SCC 632 [LQ/SC/2005/507] .

(12) Daman Singh Versus State of Gujarat reported in 1985 (2) SCC 670 [LQ/SC/1985/114] .

(13) Ravi Yashwant Bhoir Versus District Collector, Raigad and Others reported in 2012 (4) SCC 407 [LQ/SC/2012/257] .

(14) Ganpat Mohanbhai Vasava versus Additional Developement Commissioner reported in 2008 (1) GLR 844. [LQ/GujHC/2008/142]

(15) Veneshkumar Ratanlal Patel and Others versus Agricultural Produce Market CommitteeSinor and Others reported in 2014 (2) GLH 730.

(16) Vasantbhai Vadilal Joshi versus Laxmikuvar Virendrasinh Parmar rendered on 27.09.2021 in Special Civil Application No.7941 of 2021 against which Special Leave Petition preferred before the Hon’ble Supreme Court was also dismissed by the order dated 08.11.2021."

6. On the other hand, learned Senior Advocate Mr.B.S.Patel appearing for the respondent-Federation submitted that once the election process starts, interference by the Court is not called for as the petitioners are required to avail the alternative efficacious remedy to challenge the order passed by the Board of Nominees by filing an Appeal before the Tribunal and / or challenge the election process before the Election Tribunal as provided under Section 145U of the Act.

6.1. It was submitted that in the matters where alternative efficacious remedy is available, no interference is required and Writ Petition should not entertained ignoring such statutory dispensation.

6.2. It was submitted that the Board of Nominees after considering the averments made in the application for stay has found a primafacie case restraining the petitioners from discharging their duties as members as the petitioners were not eligible to continue as per the by-laws of the Federation. It was submitted that where there is a mere error of law and alternative remedies are also available, jurisdiction of this Court under Article 227 is not attracted. Learned Senior Advocate Mr.Patel pointed out that when there is a statute which provides for machinery for determination of the election disputes, writ petition under Article 226 challenging the right of the petitioners to vote in the election is not maintainable.

6.3. In support of his submissions, learned Senior Advocate Mr.Patel referred to and relied upon the following decisions in which it is held that the writ jurisdiction should not no be exercised when there is alternative efficacious remedy is availble :

"(1) Shaji K. Joseph Versus Vishwanath reported in (2016) 4 SCC 429 [LQ/SC/2016/299] .

(2) Commissioner of Income Tax and Others Versus Chhabil Dass Agarwal reported in (2014) 1 SCC 603 [LQ/SC/2013/871] .

(3) Dipakbhai Prahladbhai Patel Versus State of Gujarat reported in 2016 (2) GLR 1626. [LQ/GujHC/2015/1677]

(4) Mohd. Yunus Versus Mohd. Mustaqim and Others reported in (1983) 4 SCC 566 [LQ/SC/1983/280] .

(5) Gujarat University Versus N.U.Rajguru and Others reported in 1987 (Supp) SCC 512 [LQ/SC/1987/752] ."

7. Learned advocate Mr.Hriday Buch and learned advocate Mr.Saurabh Amin adopted the submissions made by learned Senior Advocate Mr.B.S.Patel in support of the elected respondent No.5 in the election and further relied upon the following decisions reiterating that petitions should not be entertained when it pertains to election disputes:

"(1) Laxmibai Versus Collector, Nanded and Others reported in (2020) 12 SCC 186 [LQ/SC/2020/236 ;] .

(2) Daheda Group Seva Sahakari Mandli Limited versus R.D.Rohit, Autho. Officer & CO. Operative Officer (Marketing) reported in (2006) 1 GCD 211 (FB).

(3) Bhilalbhai Ukabhai Board & Ors. Versus Election Officer & Dy. Collector, Amreli & Ors. reporeted in (1997) 3 GCD 789.

(4) Maharaja Chintamani Saran Nath Shahdeo Versus State of Bihar & Others reported in (1999) 8 SCC 16 [LQ/SC/1999/971] ."

8. By order dated 29.11.2022, the Registry was directed to call for the original records of the Lavad Case Nos.131 to 134 of 2022 from the Board of Nominees, Ahmedabad which has been collected by the Registry and placed before the Court.

9. The facts are not in dispute. The main contention of the respondents is that this Court should not entertain these petitions because alternative efficacious remedy is available to the petitioners to challenge the impugned interim order passed by the Board of Nominees under Section 102 of the Act, 1961. However, an ex-parte order was passed by the Board of Nominees on 18th June, 2022 which was a Saturday without giving hearing to the petitioners knowing fully well that the election of the Federation was scheduled next day on Sunday i.e. on 19th June, 2022.

10. In the ex-parte order passed by the Board of Nominees, no reason is assigned with regard to prima-facie case, balance of convenience or irreparable injury arising out of the facts of the case. The Board of Nominees also did not consider the fact that the reliefs prayed in the plaint for restraining the petitioners from availing their rights as members of the Federation would not fall within the jurisdiction of the Board of Nominees under Section 96 of the Act, 1961.

11. The petitioners have placed on record the intimation of the stay granted by the Board of Nominees. Therefore, the original record was called for and on perusal of the original record, it appears that the Board of Nominees has passed interim order on 18th June, 2022 considering the bye-law No.9(A)(I) to form an opinion that the petitioners are not having the eligibility to become the member and there is a provision of bye-law No.11(A) that the membership of the petitioners would be liable to be cancelled and after recording such prima-facie opinion, the impugned order was passed without examining the provisions of the Act, 1961, more particularly, Section 23 of the Act, 1961 which deals with the issue of the membership of any Co-operative Society to be decided by the Registrar, Co-operative and not by the Board of Nominees. The Federation also in the reply filed before the Board of Nominees has contended that the Board of Nominees has no jurisdiction to entertain the Suit under Section 96 of the Act, 1961.

12. From the facts recorded herein above it is apparent that the Board of Nominees has passed the impugned orders including the order below Exh.-6 in Lavad Case No.134 of 2022 which is also challenged before this Court without assigning any reason with regard to the submissions made by both the sides on the ground that the petitioners have obtained the membership as per the provisions of the Act, 1961 and the bye-laws of the Federation. It is also pertinent to note that the Board of Nominees passed the order below Ex.6 in Lavad suit No.134 of 2022 on 09.09.2022 during the pendency of the petition before this Court over reaching the process, without waiting for the final outcome of the litigation.

13. In view of the above undisputed facts and considering the settled legal positions as held by this Court as well as the Apex Court with regard to the maintainability and entertaining the Writ Petition under Article 226 of the Constitution of India in the following decisions, both the petitions are entertained on merits as the Board of Nominees on face of the record has exceeded the jurisdiction vested in it under Section 96 of the Act, 1961 which reads as under:

"CHAPTER IX.

PROCEDURE FOR DECIDING DISPUTES.

96. (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, management or business of a society shall be referred in the prescribed form either by any of the parties to the dispute, or by a federal society to which the society is affiliated, or by a creditor of the society, to the Registrar, if the parties thereto are from amongst the following:—

(a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the Liquidator of the society;

(b) a member, past member or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society;

(c) a person, other than a member of the society, who has been granted a loan by the society, or with whom the society has or had transactions under the provisions of section 46, and any person claiming through such a person;

(d) a surety of a member, past member or a deceased member, or a person other than a member who has been granted a loan by the society under section 46, whether such a surety is or is not a member of the society;

(e) any other society, or the Liquidator of such a society.

(2) When any question arises whether for the purposes of sub-section (1) a matter referred to for decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final.

Explanation 1.—For the purposes of this sub-section, a dispute shall include—(a) a claim by a society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member, whether such a debt or demand be admitted or not;

(ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a society and recovered from the surety owing to the default of the principal borrower, whether such a sum or demand be admitted or not;

(iii) a claim by a society for any loss caused to it by a member, past member, or deceased member, by any officer, past officer or deceased officer, by any agent, past agent or deceased agent, or by any servant, past servant or deceased servant, or by its committee, past or present whether such loss be admitted or not;

(iv) a refusal or failure by a member, a past member or a nominee, heir or legal representative of a deceased member, to deliver possession to a society of land or any other asset resumed by it for breach of conditions of the assignment.

Explanation II .—For the purposes of this section, the expression "agent" includes in the case of a housing society, an architect, engineer or contractor engaged by the society.”

14. On perusal of above provision , it is clear that when the respondent No.1 has filed the Lavad Suit with a prayer to restrain the petitioners from discharging their duties and availing rights of the members of the Federation has no locus standi to restrain the petitioners from casting their votes in the election held on 19th June, 2022. The petitioners are the members of the Federation since 2021 and the respondent No.1 did not raise any objection when the final voters list was published by the Election Officer and the election process was already in motion and on the previous day of the election, the respondent No.1 filed the Lavad Suit in which the Board of Nominees has passed the impugned order contrary to the provisions of Section 96 of the Act, 1961 so as to stall the democratic process by restraining the petitioners by voting in the election held on 19th June, 2022. This Court as well as the Apex Court has held in the following decisions that in such circumstances writ jurisdiction can be exercised:

"(1) Benedict Denis Kinny Versus Tulip Brian Miranda with Prachi Prasad Parab Versus State of Maharashtra reported in AIR 2020 SC 3050 wherein, the Hon’ble Supreme Court while discussing the scope of judicial review by the High Court in exercise of its constitutional jurisdiction conferred under Article 226 of the Constitution of India held that the High Court can pass an order interdicting a legal fiction engrafted in a State enactment as such power is an integral and essential feature of constitution and is basic structure of constitution. It was further held that look out of the High Court is to see whether injustice has resulted on account of any decision of a constitutional authority, a statutory authority, a tribunal or an authority within meaning of Article 12 and in such case, judicial review is designed to prevent cases of abuse of power or neglect of a duty by public authority.

(2) Magadh Sugar & Energy Ltd. Versus State of Bihar reported in (2021) 11 Scale 350 wherein, the Hon’ble Supreme Court held that a High Court would normally not exercise its writ jurisdiction under Article 226 if an effective and efficacious alternate remedy is available, existence of an alternate remedy does not by itself bar High Court from exercising its jurisdiction in certain contingencies if order of authority is challenged for want of authority jurisdiction which is a pure question of law.

(3) Election Commission of India versus Ashok Kumar and Others reported in 2000 (8) SCC 216 [LQ/SC/2000/1287] wherein, it was held by the Apex Court in the facts of the case that interference with election process sought for has the effect of interrupting, obstructing or protracting the election proceedings, then judicial remedy should be postponed till after the completion of such proceedings and subject to this, order issued by election commission is open to judicial review on ground of mala-fide or arbitrary exercise of power.

(4) Ishwarbhai Narayanbhai Patel versus State of Gujarat reported in 2021 JX (Guj) 624 wherein, it was held by the Division Bench of this Court with regard to the facts of the case that the petition under Article 226 is maintainable despite availability of an alternative remedy, yet the powers are to be exercised in case of extraordinary or special circumstances such as where the order is ultra vires or nullity and / or ex facie without jurisdiction. In the facts of the said case, it was held that ordinarily, the remedy provided by the statute must be followed before the authority designated therein. But there may be cases before the Court where exceptional or extraordinary circumstances may exist to justify bypassing the alternative remedies. It was further held that in a case where the statutory authority has not acted in accordance with the provisions of the law or acted in defiance of the fundamental principles of judicial procedure, or has resorted to invoke provisions which are repealed, or where an order has been passed in violation of the principles of natural justice, then, in such circumstances, the Writ Court should not hesitate to entertain the writ application despite the fact that the aggrieved person has an efficacious alternative remedy available in law.

(5) Mahendra Maganbhai Patel versus State of Gujarat reported in 2014 JX (Guj) 62 wherein, the Division Bench of this Court held that whenever it is found by the Court that an extraordinary case is made out and it is found that there is an attempt to create an artificial majority and the action is found to be not only illegal but also fraud on election process and the intervention of the Court is warranted, the Court can certainly entertain the petition under Article 226 of the Constitution of India and grant the relief and / or issue writ in exercise of powers under Article 226 of the Constitution of India.

(6) Shrutbandhu H. Popat versus State of Gujarat reported in 2007 (3) GLR 1942 wherein, in the facts of the case it was held by the Division Bench of this Court that in preparation of the voters list, the fraud was committed for creating artificial majority of voters by granting as many as 293 licenses including 269 fresh licenses illegally which would be a fraud on election process as the challenge of grant of license would be time consuming and would not be completed before the date of election and the election tribunal is not empowered to decide whether license was granted in accordance with the relevant provisions of the Act and the Rules and therefore entertained the Writ Petitions by issuing various directions quashing and setting aside the resolution granting general licenses for traders to 293 persons holding it to be illegal and fraud on election process prohibiting such persons from participating in the election.

(7) State of U.P. and Others versus Ram Sukhi Devi reported in (2005) 9 SCC 733 [LQ/SC/2004/1156] wherein, the Apex Court in the facts of the case held that final relief in the form of Writ Petition has been granted as an interim measure. It was further held that the Apex Court, on numerous occasions, has observed that the final relief sought for should not be granted at an interim stage. The position is worsened if interim direction has been passed with stipulation that the applicable Government order has to be ignored. It was further observed by the Apex Court that time and again the Apex Court has deprecated the practice of granting interim orders which practically give the principal relief sought in the petition for no better reason than that of prima-facie case having been made out, without being concerned about the balance of convenience, the public interest and a host of other considerations. It was held that no basis has been indicated as to why learned Single Judge thought the course as directed was necessary to be adopted. Even it was not indicated that a prima-facie case was made out though as noted above, that itself is not sufficient. The Apex Court thereafter set aside the order passed by the learned Single Judge as affirmed by the Division Bench and without expressing any opinion on the merits of the case as the Apex Court interfered primarily on the ground that the final relief has been granted at an interim stage without justifiable reasons.

(8) Sardarkunj Co-operative Housing Society Limited and Others Versus Ramabhai Jethabhai Patel and Others reported in 1984 GLH 1059 wherein, it was held by this Court that dispute whether a person was legally enrolled as a member would fall under Section 23 of the Gujarat Co-operative Societies Act and general provisions of Section 96 stands excluded. It was observed by this Court that as per the provisions of Section 23(2) of the Act, the Registrar can entertain a dispute with regard to granting of membership and can make proper order of removal of the concerned person after giving him notice and opportunity of hearing. Such an order of Registrar would also be revisable by appropriate authority as laid down by Section 155 of the Act. Thus, the legislature has made express provision for resolution of such types of disputes and has also provided hierarchy of proceedings for challenging the orders passed in such proceedings. In that view of the matter, general provisions of Section 96 of the Act which otherwise would cover all sorts of disputes including the dispute of membership would get excluded protanto.

(9) Maganbhai Khanabhai Nandodaria versus Vandematram Co-operative Society Limited reported in 2003 (3) GLH 482 wherein, it was held by this Court that the Board of Nominees has no jurisdiction when the resolution is passed at Annual General Meeting of Society regarding expulsion of member from membership of Society and process for approval / disapproval or deemed approval is concluded by machinery provided under Section 36 i.e. District Registrar, Registrar and Deputy Secretary under Section 36, 153 and 155 of the Act. This Court relied upon the decision of Jitendra Natverlal Thaker and Others versus Hirabag Co-operative Housing Society Limited and Others reported in 1978 (19) G.L.R. 92 wherein, it was held that the decision of Society to expel the deceased member which has been duly approved by the Registrar would become final under Sub-section 6 of Section 153. If an appeal is preferred, the order passed in appeal would become final. Such a final decision cannot be subject matter of dispute under Section 96 of the Act.

(10) The decision of the Division Bench of this Court in case of Vasantbhai Vadilal Joshi versus Laxmikuvar Virendrasinh Parmar rendered on 27.09.2021 in Special Civil Application No.7941 of 2021 against which Special Leave Petition preferred before the Hon’ble Supreme Court was also dismissed by the order dated 08.11.2021. This Court in the facts of the said case held that if there is any hurdle faced by the citizen in acquiring his voting right, he would only have the protection and remedies that are available in establishing the said constitutional right. When once such a voting right is acquired, thereafter, the casting of the said voting right having been recognised as a fundamental right, should have all the protection and safeguards that are available as provided under ChapterIII of the Constitution. Thereafter, infringement of such a right will certainly call for the intervention of this Court in the exercise of its extraordinary jurisdiction under the Constitution. It was further held that at the end of the day, the “Rule of Law” must prevail. The power of judiciary lies, not in deciding cases, nor in imposing sentences, nor in punishing for contempt, but in the trust, confidence, and faith of the common man. We don’t want a common man to lose faith and confidence in the judiciary but rather we should instill confidence and faith by condemning the act and setting it right.

(11) ZOROASTRIAN Co-operative Housing Society Limited versus District Registrar, Co-operative Societies (Urban) reported in 2005 (5) SCC 632 [LQ/SC/2005/507] wherein, the Apex Court in the facts of the case held that the rights of a member or an allottee over a building or plot is attachable and saleable in enforcement of a decree or an obligation against him cannot make a provision like one found in the byelaws, an absolute restrain on alienation to attract Section 10 of the Transfer of Property Act. It was further held that it is property in the hands of the member on the strength of the allotment which may be attachable and saleable in spite of the volition of the allottee but that does not enable the Court to hold that the condition that an allotment to the member is subject to his possessing the qualification to be a member of the Co-operative Society or that a voluntary transfer by him could be made only to the Society itself or to another person qualified to be a member of the Society and with the consent of the Society could straightway be declared to be an absolute restraint on alienation, and consequently, an interference with his rights to property protected by Article 300A of the Constitution of India. The Apex Court was therefore satisfied that the finding that the restriction placed on rights of a member of the Society to deal with property allotted to him must be deemed to be invalid as an absolute restraint on alienation is erroneous and therefore the said finding was reversed.

(12) Daman Singh Versus State of Gujarat reported in 1985 (2) SCC 670 [LQ/SC/1985/114] wherein the Apex Court while dealing with the provisions of Section 13(8) read with Section 1 of the Punjab Co-operative Societies Act, 1961, a Co-operative Society being Corporation, the Act is applicable and is not challengeable on this count so as to get protection under Article 31-A(1)(c) of the Constitution of India by giving a broad interpretation to the said provision on account of the requirement of the public interest, proper management of the Corporation mentioned therein. It was held that there cannot be the slightest doubt that a Co-operative Society is a corporation as commonly understood and the scheme of the Constitution does not make any difference. The very mention of Co-operative Societies i.e. both in Entry 43 of List I and Entry 32 of List II along with other corporations give an indication that the constitutional makers were of the view that Co-operative Societies were of the same genus as other corporations. In fact, the very express exclusion of Co-operative Societies from Entry 43 of List I is indicative of the view that but for such exclusion, Co-operative Societies would be comprehended within the meaning of expression “Corporations”. It was held that the very philosophy and concept of the Co-operative movement is impregnated with the public interest and the amalgamation of Co-operative Societies when such amalgamation is in the interest of the Co-operative Societies is certainly in the public interest or can only be to secure the proper management of the Societies.

(13) Ravi Yashwant Bhoir Versus District Collector, Raigad and Others reported in 2012 (4) SCC 407 [LQ/SC/2012/257] wherein, the Apex Court in the facts of the said case held with regard to the issue of locus of the complainant that when no injury caused to ex-President he could not be considered as aggrieved party and party to lis, therefore, charges against appellant do not warrant order to removal and explanation furnished by appellant could have been accepted.

(14) Ganpat Mohanbhai Vasava versus Additional Developement Commissioner reported in 2008 (1) GLR 844 wherein, it was held by this Court with regard to the person who can be said to be an aggrieved person relying upon the decision of Lalbhai Trading Company Versus Union of India reported in 2006 (1) GLR 497 [LQ/GujHC/2005/818] of the Division Bench that any person as stated in Section 57(3) of the Gujarat Panchayat Act, 1993 can only be a person upon whom some legal burden has been imposed or who has been deprived of something to which he is legally entitled, with reference to the provisions of the statute.

(15) Veneshkumar Ratanlal Patel and Others versus Agricultural Produce Market Committee-Sinor and Others reported in 2014 (2) GLH 730 wherein, in the facts of the said case this Court quashed and set aside the election of Chairman and Vice-Chairman of the respondentMarket Committee on the ground that the respondent No.2 acted in total defiance of procedural requirement of the democratic process of holding the election and in arbitrary and unreasonable manner and therefore, the Court would not relegate the petitioners to avail alternative remedy.

(16) Banaskantha District Co-operative Union Limited Versus State of Gujarat and Others reported in 2011 (2) GLR 1707 wherein, this Court in the facts of the said case while considering Sections 13 and 153 of the Act, 1961 held that question whether the byelaws which came to be approved by the competent authority, such approval did not reflect the exact amendment which was proposed and resolved. Therefore, the change and modification was at the end of Registrar without it being notified to the Society. It was therefore held that order of authorities which was bereft of merits without recording the reasons as to why the Society should not be believed that the agenda item along with the Annexures was sent and more particularly, when such resolution was not challenged by any member including the petitioner then it would have been sufficient ground for rejecting the appeal as well as the revision holding against the respondent and therefore, the impugned orders were quashed and set aside. The Court without entering into the aspect of maintainability of appeal by individual member under Section 153 of the Act challenging the order of approval granted by the Registrar in exercise of the powers under Section 13 of the Act held that the approval was in consonance with the law laid down in respect of reserving two seats in the managing committee for women and the respondent being not in any way indicating any likely prejudice cannot be permitted to challenge such approval by way of belated appeal.

(17) The Bengal Secretariat Cooperative Land Mortgage Bank And Housing Society Ltd. Versus Sri Aloke Kumar reported in 2000 (0) AIJEL-SC 69976 wherein the Apex Court has held as under:

“59. The object of the provision has to be borne in mind. The entire legislative scheme goes to show that the Co-operative Society is to function democratically and the internal democracy of a society, including resolutions passed in accordance with the Act, the Rules, and the bye-laws have to be respected and implemented. The Co-operative Movement is both a theory of life and a system of business. It is a form of voluntary association where individuals unite for mutual aid in the production and distribution of wealth upon principles of equity, reason and common good. It stands for distributive justice and asserts the principle of equality and equity ensuring to all those engaged in the production of wealth a share proportionately commensurate with the degree of their contribution. It provides as a substitute for material assets, honesty and a sense of moral obligation and keeps in view the moral rather than the material sanction. The movement is thus a great Co-operative movement.

60. The basic principles of co-operation are that the members join as human beings and not as capitalists. The Co-operative Society is a form of organization wherein persons associate together as human beings on the basis of equality for promotion of economic interest of its members. This movement is a method of doing the business or other activities with ethical base. “Each for all and all for each” is the motto of the co-operative movement. This movement not only develops latent business capacities of its members but produces leaders; encourages economic and social virtues, honesty and loyalty, becomes imperative, prospects of better life, obtainable by concerted effort is opened up; the individual realises that there is something more to be sought than mere material gains for himself. So, in fact, it being a business cum moral movement, and the success of the Co-operative Society depends upon the reality with which one of the members work for the achievement of its objects and purpose. The Committee on Co-operation in India emphasized the moral aspect co-operation, to quote the words:—

“The theory of co-operation is very briefly that an isolated and powerless individual can, by association, with others and by moral development support, obtain in his own degree the material advantages available to wealthy or powerful persons and thereby develop himself to the fullest extent of his natural abilities. By the Union of forces, material advancement is secured and by united action self reliance is fostered and it from the inter-action of these influences that it is hoped to attain the effective realisation of the higher and more prosperous standard of life which has been characterised as better business, better arming and better living; we have found that there is a tendency not only among the outside public but also among supporters of the movement to be little its moral aspect and to regard this as superfluous idealism. Cooperation in actual practice must often fall short of the standard aimed at and details inconsistent with co-operative ideals have often to be accepted in the hope that they may lead to better things. We wish clearly to express that it is the true co-operation alone, that is, to a co-operation which recognises the moral accept of the question that Government must look for the amelioration of the masses and not to a psudo co-operative edifice, however imposing, which is built in ignorance of co-operative principles. The movement is essentially a moral one and it is individualistic rather than socialistic. It provides as a substitute for material assets honesty and a sense of moral obligation and keeps in view the moral rather than the material sanction. Pages 5 and 6 of Theory and Practice of Co-operation in India and Abroad by Kulkarni, Volume 1. Co-operation is a mode of doing business, is at present applied as the solution of many economic problems. Co-operation is harnessed to almost all forms of economic activity. Though cooperation was introduced in this country as a remedy for rural indebtedness, it has been applied successfully in a wide range of activities such as production, distribution, banking, supply, marketing, housing and insurance. See Theory and Practice of Co-operation in India and Abroad by Kulkarni Volume 1 Page 2.”

15. Considering the above conspectus of law with regard to the interference by the judicial or quasi-judicial authority when the election process was going on is deprecated by the Court time and again. In the facts of the case, decisions relied upon by the learned advocates for the respondents would not be applicable.

16. It appears that apparently, the Board of Nominees has passed the impugned order so as to overreach the election process by restraining the petitioners from voting. In such circumstances, both the petitions deserve to be allowed and accordingly, the impugned orders passed by the Board of Nominees are quashed and set aside. The Lavad Suits preferred by the respondent No.1 are also ordered to be dismissed as the Board of Nominees has no jurisdiction to try such suits. As the election has already been held on 19th June, 2022 and respondent No.5 is declared to be elected candidate, the petitioners can file appropriate proceedings under Section 145U of the Act, 1961 challenging such election in accordance with law before the Election Tribunal as a consequence of the orders passed in these petitions. If any such Election Petition is preferred by the petitioners, the same shall be decided within a period of three months from the date of filing by the competent authority.

17. Rule is made absolute to the aforesaid extent. No orders as to cost.

18. Registry to send back the original record of Lavad Case Nos.131 to 134 of 2022 which was called for by this Court to the Board of Nominees.

Further Order :

19. After the judgment was pronounced, learned advocate Mr.Baiju Joshi for the original plaintiffs made a request to stay the implementation and operation of this judgment for two weeks.

20. Considering the fact that the petitioners are granted time to file Election Petition before the Election Tribunal, the request is rejected.

Advocate List
  • MR. V.C. VAGHELA

  • MR. AAYAN PATEL, AGP, MR. BAIJU JOSHI, MR. CHIRAG B. PATEL, MR. SAURABH G. AMIN

Bench
  • HON'BLE&nbsp
  • MR. JUSTICE BHARGAV D. KARIA
Eq Citations
  • LQ
  • LQ/GujHC/2023/2241
Head Note

**Headnote** Gujarat Cooperative Societies Act, 1961 — Lavad Suits — Maintainability — Held, the Board of Nominees constituted under the Gujarat Cooperative Societies Act, 1961 (for short ‘the Act, 1961’) has no jurisdiction to entertain a suit filed under Section 96 of the Act, 1961 challenging the membership of a member of a Cooperative Society — Held further, the Board of Nominees acted without jurisdiction in passing an interim order restraining the petitioners from exercising their rights as members of a Cooperative Society in a suit filed under Section 96 of the Act, 1961. [Paras 4.2 to 4.16] Gujarat Cooperative Societies Act, 1961 — Election — Interference by Court — Held, the Court should not interfere in an election dispute when an efficacious alternative remedy is available — Held further, in the instant case, the petitioners had an efficacious alternative remedy by way of an appeal before the Tribunal and / or by challenging the election process before the Election Tribunal as provided under Section 145U of the Act, 1961 — Held also, the Court should not entertain a writ petition ignoring such statutory dispensation. [Paras 6.1 to 6.3] Gujarat Cooperative Societies Act, 1961 — Election — Interference by Court — Held, when the election process is in motion, the Court should not interfere by entertaining a writ petition challenging the election process — Held further, in the instant case, the Board of Nominees passed an ex-parte order restraining the petitioners from availing their rights as members of a Cooperative Society without giving them an opportunity of hearing, knowing fully well that the election of the Federation was scheduled next day — Held also, the Board of Nominees passed the impugned order without examining the provisions of the Act, 1961, more particularly, Section 23 of the Act, 1961 which deals with the issue of the membership of any Cooperative Society to be decided by the Registrar, Co-operative and not by the Board of Nominees. [Paras 9 to 12] Gujarat Cooperative Societies Act, 1961 — Election — Interference by Court — Held, the Court can exercise its jurisdiction under Article 226 of the Constitution of India in election disputes in cases where the Board of Nominees has exceeded the jurisdiction vested in it or where the order passed by the Board of Nominees is ultra vires or nullity and / or ex facie without jurisdiction — Held further, in the instant case, the Board of Nominees passed the impugned order contrary to the provisions of Section 96 of the Act, 1961 so as to stall the democratic process by restraining the petitioners by voting in the election held on 19th June, 2022 — Held also, the impugned order was passed apparently under political pressure. [Paras 13 to 15]