9911796707
TMI Blog2017 (4) TMI 1391X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as its Chairman for a period of three years commencing from 2.5.2011 to 1.5.2014. However, he continued to hold the office beyond the period of three years by virtue of the operation of Section 74C(2) - as it then existed: Section 74C(2). When the election of all the members of the committee of any such societies held at the same time, the members elected on the committee at such general election shall hold office for a period of three years from the date on which the first meeting is held and shall continue in office until immediately before the first meeting of the members of the new committee. 3. During the continuance of Chaudhary in the office, a show-cause notice was issued on 12.1.2015 (hereafter "Show-Cause Notice-I") by the Registrar4 of the Co-operative Societies (hereafter "the Registrar") purporting to be one issued Under Section 76B(1) & (2) of THE ACT calling upon Chaudhary to show cause why he should not be removed from the office for various reasons mentioned therein.5 Chaudhary challenged the said show-cause notice by way of a writ petition. It was dismissed by the Gujarat High Court as pre-mature. The dismissal was confirmed by a Division Bench in a Letters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of another Writ Petition (SCA No. 17826 of 2015) unsuccessfully.7 Chaudhary carried the matter in Letters Patent Appeal (LPA No. 1343/2015)8. 11. Eventually, the LPA No. 1343/2015 of Chaudhary was allowed by the High Court on 2.11.2015. The Show-Cause Notice-II was quashed holding: "16. If the impugned order of the learned single Judge is examined in light of the observations made by us hereinabove, it can be said that the learned single Judge has committed error in interpreting the provisions of Section 76B(1) and 76B(2) of the Act and the consequential order for dismissal of the Petitioner calls for interference. 17. As observed by us, if the second separate show cause notice is not contemplated as per Section 76B(2) of the Act, and both the consequences should arise in only one proceeding under proceedings of 76B of the Act, then the fact remains that the order for disqualification was quashed by this Court without there being any express liberty reserved for continuation with the proceedings for disqualification Under Section 76B(2) of the Act. Therefore, in light of the aforesaid observations and discussions, it can be said that the impugned action of issuance of separate s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is beyond the scope of Section 76B of the Act, the said decisions would be of no help to Mr. Jani, learned AAG." 19. Mr. Jani, learned AAG did attempted to contend that the Appellant in the earlier round of litigation of SCA 9618 of 2015 had contended that separate show cause notice Under Section 76B(2) of the Act was required to be issued and not the composite notice Under Section 76B(1) & (2) and he further contended that learned single judge having accepted the said aspect, it would not be open to the Petitioner to play hot and cold at the same time, and now to contend that a composite notice was required, more particularly when the learned single Judge has accepted the said contention and the said order has been not interfered with in the LPA. 15. In the meanwhile on 23.10.2015, a notification fixing the dates for the election to the Managing Committee of the UNION for the tenure commencing from 2015 to 2020 was issued. Chaudhary filed his nomination. He was declared elected uncontested on 18.11.2015. 16. Aggrieved by the judgment in LPA No. 1343 of 2015 dated 2.11.2015 by which the second show-cause notice was quashed by the High Court, State of Gujarat and others filed SL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B(2)] by the High Court in Writ Petition No. 9618 of 2015. The same was allowed by the Registrar to become final without any further challenge. Therefore, Show-Cause Notice-II could not have been issued in the absence of the grant of any leave by the High Court to issue a fresh show-cause notice Under Section 76B(2). (ii) If Show-Cause Notice-II is illegal, all further action flowing from show-cause notice-II are void ab initio. (iii) Assuming for the sake of argument that the Registrar is entitled to issue show-cause notice-II and take consequential action, the process of disqualifying Chaudhary invoking power Under Section 76B(2) is unsustainable, because each one of the acts or omissions which formed the basis for action against Chaudhary was either taken by or ratified by the governing body ("committee") of the society. Therefore, action if at all required ought to be taken against the entire governing body of the society Under Section 81 but not against individual members thereof Under Section 76B. (iv) Alternatively, it is submitted that even if resort to the power Under Section 76B is permissible, show-cause notice-II narrates the same set of facts and gives the same reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e office as well as the decision to disqualify Chaudhary Under Section 76B(2). (v) Assuming for the sake of argument that the various actions/omissions which formed the basis for action against Chaudhary are either with prior approval or subsequent ratification of the Committee of the UNION-justifying action Under Section 81 of THE ACT, law does not prohibit action against individual members of the Committee. On the other hand, Section 76B clearly provides for such a possibility. 22. A brief survey of the two provisions of THE ACT is necessary to examine the various questions involved in these appeals. 23. Section 76B provides for (i) removal of "any officer"; and (ii) disqualification of such a removed officer to hold or contest election to any office either of that Society or any other Society for a certain period. "76B. Removal of officer - (i) If, in the opinion of the Registrar, any officer makes persistent default or is negligent in performance of the duties imposed on him by this Act or the Rules or the bye-laws or does anything which is prejudicial to the interests of the society or where he stands disqualified by or under this Act, the Registrar may, after giving the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, whichever is less. 25. The expressions "committee", "officer" and "society" are defined expressions Under Section 2(5), 2(14) and 2(19) of THE ACT: Section 2(5) "committee" means the Managing Committee or the governing body of a society to which the direction and control of the management of the affairs of a society is entrusted to; Section 2(14) "officer" means a person elected or appointed by a society to any office of such society according to its bye-laws; and includes a chairman, vice-chairman, president, vice-president, managing director, manager, secretary, treasurer, member of the committee, and any other person elected or appointed under this Act, the Rules or the bye-laws, to give directions in regard to the business of such society; Section 2(19) "society" means a co-operative society registered, or deemed to be registered, under this Act; Further analysis of Sections 76B and 81 would be undertaken in the judgment at the appropriate place. 26. It was in exercise of the power Under Section 76B. Action was initiated against Chaudhary initially by issuing Show-Cause Notice-I which culminated in a final order dated 10.3.2015 by which Chaudhary was removed from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court would reappreciate the material and record a different finding as that of the appellate court. After having expressed the view for the scope of judicial review, when we have considered the contents of the impugned order passed by the learned Single Judge, it appears that no error has been committed by the learned Single Judge in affirming or not interfering with the order passed by the authority Under Section 76B(1) of the Act for removal of the Appellant as Chairman of the Milk Producers Union." 28. Civil Appeal No. 14678 of 2015 [Arising out of SLP(C) No. 33630 of 2015] challenging the correctness of the above-mentioned judgment of the High Court is one of the three appeals before us.12 Therefore, it is a submission of Chaudhary that we are required to examine the correctness of the conclusion recorded by the Registrar that the charges 2, 3, 6, 9, 10 and 11 are framed against Chaudhary. In substance, the argument is that this Court should act as the appellate Court to determine the correctness of the conclusion drawn on the basis of the evidence before the Registrar. An exercise which ought not to be normally undertaken even by the High Courts in the jurisdiction Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to why he should not be disqualified".16 32. The State of Gujarat and the Registrar accepted the said judgment and let it become final. 33. Hence, the submission of Chaudhary both before the High Court and this Court that Show-Cause Notice-II could not have been issued without obtaining the leave of the High Court. Such a submission found favour with the High Court in the judgment in LPA No. 1343 of 2015 when it was called upon to determine the legality of Show-Cause Notice-II. 34. The High Court did not assign any reason for such a conclusion nor any provision of law or precedent which warrants such a conclusion is referred to. We find it difficult to sustain the conclusion. 35. Any statutory power could "be exercised from time to time as occasion requires". Such a principle is recognised by Section 1417 of the General Clauses Act, 1897 and Section 1418 of the Gujarat General Clauses Act. Power conferred on Courts to adjudicate the rights and obligations of the parties is an exception to the principle. The doctrines of res-judicata19 and double jeopardy20 prohibit the repeated invocation of the jurisdiction of the Civil Courts or repeated attempts to prosecute a person on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udhary. The submission in substance is that the acts and omissions which formed the basis of allegations leading to action against Chaudhary Under Section 76B are not the individual acts of Chaudhary but the collective acts or omissions of the Committee of the UNION. Therefore, action if at all required must be taken Under Section 81 against the entire Committee but not only against Chaudhary. In absence of any action against the Committee, action against Chaudhary is illegal and unsustainable. 39. The text of both the Sections 76B and 81 is already taken note of. Section 81 authorises the supersession of the Committee of a Society. Section 76B authorises action against individual officers of a Society. In either case, action is required to be taken upon the formation of the opinion by the Registrar22 that (i) there is a persistent default; or (ii) negligence in the performance of duties; or (iii) commission of an act which is prejudicial to the interest of the Society or its members. 40. Committee of a cooperative society by definition23 is a body to which "the direction and control of the management of the affairs of a Society is entrusted to" - though Under Section 73 of THE A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. In a given case, if a decision taken by the committee is so patently prejudicial to the interest of the society calling for action Under Section 81, there is a collective failure of the individual members of the committee to perform their respective duty to give right directions in regard to the business of the society. Registrar is authorised to supersede the committee and appoint an administrator. If such course of action is proposed by the Registrar, it will not be open to an individual member of the committee to argue that he was not a party to such an objectionable conduct of the committee because either he abstained from the decision making process or disagreed with the objectionable course of action taken by the other (majority) members of the committee and therefore, there is no individual culpability on his part. Section 81 of THE ACT authorises collective action against all the members of the committee. The collective failure of the committee in performing its duty is such that warrants supersession of the committee. All individual officers lose their offices irrespective of their contribution to the culpable action of the committee. Even in such cases of the failu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhary that the reliance upon the same set of facts in both Show-Cause Notices-I and II would render the Show-Cause Notice-II and the action consequent thereupon illegal. At the outset, we must state that we have examined the tenor of both the show-cause notices and we proceed on the basis that the tenor of both of them is substantially the same if not identical. 46. Section 76B(1) contemplates removal of an officer of a society if the Registrar is satisfied that such an officer is guilty of any one of the misconducts specified under the section. Sub-section (2) further authorises the Registrar to disqualify such an officer either to contest or to hold any office in that society from which the officer is removed and also in any other society for a period to be specified by the Registrar subject to a statutory outer limit. From the language of Sub-section (2), it appears to us that the Registrar is not obliged to disqualify every officer against whom an order of removal Under Section 76B(1) is passed. Going by the text of Sub-section (2) which says that the "Registrar may ...direct that the officer so removed shall be disqualified.....", the power to disqualify is discretionary. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceed to take action Under Section 76B(2) on the basis of the same conclusions which rendered Chaudhary liable for removal from office Under Section 76B(1). In the process, both in the show-cause notice-II and the order dated 16.12.2015, the Registrar once again repeated all the allegations which formed the basis for the order Under Section 76B(1). In our opinion, it was not really necessary. It would have sufficed if the Registrar mentioned the fact that Chaudhary was removed from the office of Chairman of the Society in exercise of the power Under Section 76B(1) - the mention of such a fact is also not mandatory. It is only a condition precedent for initiating action Under Section 76B(2). The requirements of valid notice Under Section 76B(2), in our opinion, are that the notice should indicate broadly the reasons which prompt the Registrar to initiate action and the period for which the person, against whom the action is initiated, is proposed to be disqualified. However, the mentioning of the past history though avoidable does not in any way vitiate the show-cause notice or the final order if they are otherwise in accordance with law. 49. In our opinion, there is no legal infir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides for disqualification of an officer for a period not exceeding six years. Originally the Section provided for disqualification only for four years. But the "four years" period was substituted by "six years" period by the Gujarat Co-operative Societies (Amendment) Act, 2015 (Act No. 12 of 2015). 52. All the acts and omissions which formed the basis for action against Chaudhary pertained to the period anterior30 to the Act No. 12 of 2015. Under Section 7 of the Gujarat General Clauses Act, it is provided that where an enactment is repealed by a subsequent enactment, the repeal does not normally affect any investigation or legal proceedings in respect of any right, privilege, obligations, liability, penalty, forfeiture or punishment and any legal proceeding initiated during the currency of the repealed enactment could be continued as if the repealing Act has not been passed. Repeal could be either of the entire enactment or a part of it. Substitution of parts of an enactment is nothing but pro tanto to repeal those parts. Normally when an enactment is repealed, any action initiated under that enactment dealing its currency should lapse. Because the authority of law for action i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered, under this Act;" 4. Section 2(17) - "Registrar" means a person appointed to be the Registrar of Co-operative Societies under this Act; and includes to the extent of the powers of the Registrar conferred on any other person under this Act, such person and includes an Additional or Joint Registrar; 5. Though the notice purported to have been issued invoking both sub-sections (1) and (2) of Section 76B, there is no whisper in the said notice regarding the proposal to disqualify Chaudhary for a further period. 6. Thus, taking into consideration the facts as a whole, because of the irregularities committed by him, the Union has suffered great financial damage and serious damage has been caused to the Mehsana Jilla Dudh Utpadak Sangh as well as the lacs of members providing milk in the milk societies connected with it and interests of the Pashu Palaks. In such circumstances, I consider it proper to remove him from the post and also for the aforesaid reasons, think it proper to held him disqualified to have any office in any Sahakari Mandal or to participate in any election for a period of three years. 7. The writ petition was dismissed by a judgment dated 27.10.2015. 8. It mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise. We only wonder as to how leave came to granted in the said SLP. 13. "Para 19. ... the contentions raised on behalf of the petitioner are that there was no notice in the eye of law for proposed action of disqualification and that it would be only after order for removal is passed, the action under Section 76B(2) of the Act could be taken and therefore, issuance of the combined notice under Section 76B(1) and (2) of the Act was not permissible. ..." 14. "Para 20. ... Therefore, in the context of the provision of Section 76B of the Act, the Court needs to examined whether before the order of removal could be made, action for disqualification under sub-section (2) could be initiated and whether separate order is required for disqualification under sub-section (2) after serving the order of removal to the petitioner and whether mere reference to Section 76B(2) in the show cause notice for removal could be said to be notice for proposed action of disqualification under sub-section (2)." 15. "Para 26. ... Therefore, if separate order is to be made only after the order of removal is passed, there is no question of issuing any notice proposing disqualification with notice for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (1) of section 221, or for which he might have been convicted under sub- section (2) thereof. 21. Superintendent (Tech.I) Central Excise I.D.D. Jabalpur & Others v. Pratap Rai, (1978) 3 SCC 113 "Para 6. In the case of Thimmasamudram Tobacco Co. v. Assistant Collector of Central Excise, Nellore Division, Nellore [AIR 1961 AP 324] while construing the provisions of the Central Excise and Salt Act which was almost on identical terms as the Customs Act, a Division Bench of the Andhra Pradesh High Court observed as follows (AIR p. 325, para 11): "Assuming that Section 35 of the Central Excise Act does not clothe the appellate authority with power to remand the matter to the officer whose order is appealed against, nothing stands in the way of the Assistant Collector initiating the proceedings afresh, when his order was quashed not on merits but on technical grounds i.e. for not following either the procedure or the dictates of natural justice. In a case where the flaw in the order appealed against consists of in the non-observance of certain procedure or in not giving effect to the maxim 'audi alteram partem', it is open to the officer concerned to start the procedure once again w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
