SCA/10110/2006 1/31 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 10110 of 2006 With SPECIAL CIVIL APPLICATION No. 25997 of 2006 With CIVIL APPLICATION No. 251 of 2007 With SPECIAL CIVIL APPLICATION No. 1039 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- =================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================== JAYANTIBHAI DAHYABHAI PATEL - Petitioner(s) Versus STATE OF GUJARAT & 7 - Respondent(s) =================================== Appearance : SCA No. 10110 of 2006. MR HARIN P RAVAL for Petitioner(s) : 1. MR.SHIRISH JOSHI FOR MR.BAIJU JOSHI for Respondent No.5. MR. MIHIR JOSHI, ADDL. ADVOCATE GENERAL WITH MS. ARCHANA RAWAL. AGP. for Respondent(s) : 1 to 4. DS AFF.NOT FILED (N) for Respondent(s) : 1 - 5,5.2.1 - 6,6.2.1 - 7, 7.2.1,7.2.2 – 8,8.2.1 SCA/10110/2006 2/31 JUDGMENT SCA No. 25997 of 2006. MR. HARIN P.RAVAL for petitioners. MR.MIHIR JOSHI, ADDL. ADVOCATE GENERAL WITH MS. ARCHANA RAWAL, AGP. for Respondent Nos. 1 to 5. MR.SHIRISH JOSHI WITH MR.BAIJU JOSHI for Respondent No.6. C.A.No. 251 of 2007 In SCA No.25997 of 2006. MR HARIN P.RAVAL for Applicant. MR MIHIR H.JOSHI, ADDL. ADVOCATE GENERAL WITH MS. ARCHANA RAWAL, AGP. for Respondent Nos. 1 to 5. MR.SHIRISH JOSHI with MR.BAIJU JOSHI for Respondent No.6. SCA No. 1039 of 2007. MR N.D. NANAVATI FOR MR ASHISH H SHAH for Petitioner(s) : 1, MR MIHIR H.JOSHI, ADDL. ADVOCATE GENERAL WITH MR.UMANG OZA, AGP. for Respondent(s) : 1 to 5. None for Respondent(s) : 2 - 7. =================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA Date : 05/02/2007 ORAL JUDGMENT 1 Both the petitions, Special Civil Application No. 10110 of 2006 and Special Civil Application No. 25997 of 2006, arise out of common issue, viz.,whether the petitioner (who is also common in both the petitions) can be held to be liable under the provisions of Section 93 of the Gujarat Cooperative Societies Act, 1961. As the facts in both the petitions overlap and are common, the learned Advocates appearing for the respective parties have addressed the Court in relation to both the petitions simultaneously and the petitions are therefore heard together and are being disposed of by this common judgment. The third petition, Special Civil Application No. 1039 of 2007, is consequential to the earlier two petitions, as accepted by the learned Counsel. SCA/10110/2006 3/31 JUDGMENT 2 It is the say of the petitioner that : “The petitioner is a social worker and leader in the cooperative sector since three decades. The petitioner is director in respondent no.5 Union as well as director in respondent no.7 Federation. The petitioner also is Chairman in respondent no.6 Union.” In Special Civil Application No.10110 of 2006 order dated 21.3.2006 made by the Gujarat State Cooperative Tribunal (the Tribunal) in Appeal Nos. 356 and 647 of 2002 has been challenged. In Special Civil Application No. 25997 of 2006 order dated 29.11.2006 made by the Tribunal in Appeal No. 535 of 2002 has been challenged. However, admittedly all the Appeals arise out of common order dated 17.9.2001 made by the Inquiry Officer appointed by the Registrar under Section 93 of the Act in the following circumstances : 3 The petitioner and six other Directors of the Managing Committee of Kheda District Cooperative Union (the Union) undertook a tour to New Delhi at the invitation of National Centre for Cooperative Education. A special audit was conducted at the behest of the Registrar because of which certain facts came to light. Hence, on 19.6.2001 one Shri Trilochan M.Dave was appointed as an Inquiry Officer. The Inquiry Officer issued a show cause notice to the petitioner as well as other persons in relation to the following issues : (1)Donation of a sum of Rs.1,51,000/- under resolution No.10 dated 1.10.1997; (2)Member Directors of the Managing Committee were to participate in the Leadership Development Programme SCA/10110/2006 4/31 JUDGMENT between 22.4.1998 to 24.4.1998 and hence, considering the days required for travelling to and fro, against programme of total number of 8 days the Directors travelled for 16 days along with their family members and incurred expenses of Rs.73,500/- paid to Patel Travels, thus incurring additional expenses of Rs.50,531.25 ps. which was recoverable from the responsible officers; (3)Permitting leave encashment to one Shri Manubhai M.Patel, Executive Officer, thus causing loss to the extent of Rs.94,736/- to the Union. 3.1 After considering the replies and the evidence brought on record the Inquiry Officer came to the conclusion that the charges relating to issue Nos. 1 & 3 were not proved and hence, the petitioner and the others were exonerated of the same, while at the same time the Inquiry Officer came to the conclusion that each one of the 10 committee members/directors was liable to pay a sum of Rs.5112.80 ps. being expenditure incurred beyond the sanctioned expenditure vide resolution No.10 dated 31.3.1998. This order was made on 17.9.2001. 3.2 It is an admitted fact that on 31.3.1998 the Managing Committee comprised of following ten persons passed resolution No.10 whereunder it was decided that all the members/directors of the Managing Committee should be sent as delegates to attend the Leadership Development Programme which was to be conducted by the National Cooperative Union of India, New Delhi : SCA/10110/2006 5/31 JUDGMENT (1)Shri Umedsinh Fatesinh Gohel. (2)Shri Chaturbhai Naranbhai Patel. (3)Shri Parvatsinh Chaturbhai Chauhan. (4)Shri Harikrushna Bhagwandas Chauhan. (5)Shri Vijaykumar Fulabhai Patel. (6)Shri Jayantibhai Dahyabhai Patel. (7)Shri Manibhai Bhailalbhai Patel. (8)Shri Sureshbhai Ramjibhai Patel. (9)Shri Mahendrabhai Bhanubhai Patel. (10)Shri L.P.Parmar. 3.3 The Inquiry Officer having held each one of the said ten persons responsible u/s. 93 of the Act, Shri L.P.Parmar and Shri Sureshbhai Ramjibhai Patel preferred appeals being Appeal No. 356 of 2002 and Appeal No. 647 of 2002 respectively, before the Tribunal. Vide order dated 21.3.2006 the Tribunal while allowing the appeals preferred by the said two committee members modified the personal liability qua each director and held that only the following 7 persons were liable to recompense the Union by a sum of Rs.5,477.70 ps. with interest @ 12% on and from 1.4.1999 till the date of recovery. “1 Shri Umedsinh Fatesinh Gohil. 2 Chaturbhai Naranbhai Patel. 3 Parvatsinh Chaturbhai Patel. 4 Harikrushnabhai Bhagwandas Patel. 5 Vijaykumar Fulabhai Patel. 6 Jayantibhai Dahyabhai Patel. 7 Manibhai B. Patel”. SCA/10110/2006 6/31 JUDGMENT This order has been challenged by the petitioner principally on the ground of lack of opportunity as the petitioner was not an appellant or a party in the aforesaid two appeals before the Tribunal. 3.4 One Shri Vijaybhai Fulabhai Patel, Shri Harikrishna Bhagwatbhai Patel and Shri Chaturbhai Naranbhai Patel along with the petitioner preferred appeal being Appeal No. 535 of 2002 before the Tribunal challenging order dated 17.9.2001 made by the Inquiry Officer. On 28.6.2002 at the time of admission of the appeal an exparte stay came to be granted in favour of the petitioner and three other appellants which continued from time to time. After hearing the learned Advocate for the appellants the appeal came to be dismissed by the Tribunal vide order dated 29.11.2006 against which Special Civil Application No. 25997 of 2006 has been preferred only by one of the four appellants i.e. the petitioner. The principal ground of challenge is that in the second order made by the Tribunal, the Tribunal has recorded incorrect facts and thus has proceeded on an incorrect basis. 4 At the time of hearing of the petitions the learned Counsel appearing on behalf of the petitioner has challenged both the orders of the Tribunal on the following grounds : (a) The Tribunal had not granted the petitioner an opportunity of hearing while passing the earlier order in Appeal Nos. 356/02 and 647/02 as the petitioner was not a party therein. SCA/10110/2006 7/31 JUDGMENT (b) The subsequent order made by the Tribunal, wherein the petitioner was an appellant proceeds on an incorrect factual basis and is thus vitiated. (c) That on merits the basis adopted by the Inquiry Officer and confirmed by the Tribunal is incorrect because only a sum of Rs.73,500/- had been paid to Patel Travels for the entire trip and no further or other expenses had been incurred so as to fasten any liability on the petitioner. (d) That the onus to show that any expenditure beyond the expenditure incurred as supported by the resolution was on the authority and the authority had failed to discharge the said onus. (e) That an appeal was a continuation of the original proceedings and in the circumstances the Tribunal ought to have called upon the petitioner and granted opportunity to present his case. 4.1 An incidental submission was to the effect that the Tribunal was aware or ought to have been aware that an appeal preferred by three others and the petitioner was pending and hence, the Tribunal could not have heard the appeals filed by Shri L.P. Parmar and Shri Sureshbhai Ramjibhai Patel without consolidating all the three appeals. For this purpose, it was strenuously urged that the Tribunal was aware, and such awareness to the Tribunal must be presumed, because the earlier order dated 31.3.2006 made by the Tribunal had already been challenged by the petitioner before this SCA/10110/2006 8/31 JUDGMENT Court in Special Civil Application No. 10110 of 2006 and vide order dated 9.5.2006 this Court had granted ad interim relief in terms of paragraph No. 34(F) of the said petition. That writ of the said order had duly been served on the Tribunal. Therefore, the Tribunal could not have passed any order in the Appeal preferred by the petitioner and three others by placing reliance on the earlier order dated 21.3.2006 4.2. Inviting attention to provisions of Section 93 of the Act, it was submitted that none of the defaults mentioned in the said Section were shown to have been committed by the petitioner and therefore once the provision itself was not applicable the entire inquiry was bad in law and the Tribunal could not have confirmed the order of the Inquiry Officer. That in fact the proceedings were in the nature of quasi-judicial criminal proceedings and the onus was not discharged, there being no inquiry as to whether any more expenses, viz., more than the sanctioned expenditure, were actually incurred; that in absence of such inquiry and finding based on evidence no default could have been ascribed to the petitioner. 4.3 Elaborating on the submissions it was contended that the Tribunal had incorrectly recorded in order dated 29.11.2006 in Appeal No. 535 of 2002, that the Appellants had not appeared before the Inquiry Officer or had not given any reply to the charges framed against them. Whereas, in fact the petitioner and the other appellants had categorically filed their reply and the same had duly been considered by the Inquiry Officer as was apparent from SCA/10110/2006 9/31 JUDGMENT the order of the Inquiry Officer. That the petitioner in his reply filed before the Inquiry Officer had categorically contended that the sum of Rs.73,500/-, which was the sanctioned sum, had been paid to Patel Travels and was only for the purpose of trip from Nadiad to Delhi and back; that such expenses did not include any expenditure relatable to the family members or the travel for additional days and therefore there was no question of effecting any recovery from the petitioner. 5. The learned Addl. Advocate General appearing on behalf of the respondent authorities submitted that in so far as the writ petitions are concerned, in the first instance, as laid down by the Apex Court in the case of Nagendra Nath Bora And Anr. Vs. Commissioner of Hills Division, AIR 1958 SC 398, with special reference to paragraph Nos. 24 and 25, as well as in the case of Surya Dev Rai Vs. Ram Chander Rai and others, (2003) 6 SCC 675, with special reference to paragraph Nos. 38.3, 38.4 and 38.5, the petitioner was seeking a writ of certiorari which could be granted only in the event of failure of justice and not merely because there was some error in the impugned order of the subordinate Forum. Responding to the contention that the Tribunal had incorrectly recorded the facts and failed to deal with the issue of onus it was submitted that the said ground was irrelevant for deciding the validity of the order of the Tribunal because firstly, the said issue had been raised before the Inquiry Officer who had already dealt with the same; secondly no ground of challenge had been raised in the memorandum of appeal filed before the Tribunal or before the High Court in the writ petition. That the Tribunal was only SCA/10110/2006 10/31 JUDGMENT required to look into the correctness and legality of the order /report made by the Inquiry Officer and was not required to enter into reappreciation of evidence unless and until an appellant before the Tribunal specifically invited attention of the Tribunal to the order of the Inquiry Officer and the evidence on record to contend that a particular piece of evidence had not been considered by the Inquiry Officer. That this was not so in the present case. He therefore, urged that the petition did not merit acceptance and was required to be rejected on this solitary ground. 6. Mr. Shirish J.Joshi, learned Advocate appearing on behalf of the respondent Cooperative Union supported the order made by the Tribunal and submitted that at no point of time the petitioner had shown that order dated 9.5.2006 made by the High Court had been produced by the petitioner before the Tribunal in pending appeal No. 535 of 2002 so as to prevent the Tribunal from referring to its earlier order dated 21.3.2006. It was submitted that the petitioner had not produced any evidence before the Inquiry Officer that any additional sum relating to the family members and additional days of tour had been borne by the petitioner out of his pocket and therefore, the said ground cannot be considered by this Court at this stage. 7. In rejoinder, the learned Advocate for the petitioner vehemently contended that once the writ of the Court was available on record of the Tribunal, the Tribunal could not have proceeded to pass order dated 29.11.2006 by referring to and relying upon its earlier order dated 21.3.2006. According to the SCA/10110/2006 11/31 JUDGMENT learned Advocate, the Tribunal was duty bound to ensure that in the first instance all the three appeals were heard together by consolidating them, and alternatively, decide the subsequent appeal independently of the earlier order dated 21.3.2006. 8. Before proceeding to discuss the merits of the issue it is necessary to deal with and dispose of the preliminary issue which was addressed on behalf of the petitioner at great length, viz., duty of the Tribunal to consolidate the appeals. The entire submission proceeds on a fallacious premise. A Bench of the Tribunal, which is primarily supposed to decide a lis brought before the Tribunal by the parties, cannot be expected to keep track of different appeals filed by different persons and come to the conclusion that certain appeal or appeals are required to be consolidated with some other appeal or appeals which are pending. The onus lies, in such circumstances, for all times to come, on the parties before the Tribunal to point out to the Tribunal with reasons in support of the submission as to why a particular appeal or appeals, is or are, required to be consolidated with some other appeal or appeals which are pending. To assign such a duty to the Tribunal is to almost ask for the impossible and this Court is not prepared to uphold such a contention. The petitioner was very well aware that the appeals had already been filed by Shri L.P.Parmar and Shri Sureshbhai Ramjibhai Patel. There is nothing on record, nor is any explanation coming forth during the course of hearing as to why the petitioner did not point out to the Tribunal the pendency of those appeals. It is necessary to note that the appeal filed by Shri L.P.Parmar was registered as Appeal No. 356 of 2002, appeal filed SCA/10110/2006 12/31 JUDGMENT by Shri Sureshbhai Ramjibhai Patel was registered as Appeal No. 647 of 2002, while the Appeal filed by the petitioner was registered as Appeal No. 535 of 2002. In other words, the Appeal filed by the petitioner and three others was appearing in seriatim in between two appeals filed by Shri L.P.Parmar and Shri Sureshbhai Ramjibhai Patel. If the petitioner was vigilant to the extent of challenging the order of Tribunal dated 21.3.2006 by way of Special Civil Application No. 10110 of 2006, it goes to indicate that the petitioner was well aware, not only about the pendency of the said appeals, but even the point of time when the appeals were heard and decided by the Tribunal. The petitioner consciously took a decision to take a chance and did not take any steps to consolidate his appeal when the other two appeals were heard. Thereafter the petitioner cannot be heard to make a grievance that the Tribunal has failed in consolidating the appeals. In absence of any duty on the Tribunal no such failure can be ascribed to the Tribunal, or for that matter any Court or Forum. 9. In the case of Commissioner of Customs & Ors. Vs. Vasant Maganlal Chokshi & Ors. 2007(1) GCD 37(SC) the Apex Court was called upon to deal with almost a similar contention. While upholding the judgment and order dated 24.6.2005 made by this Court in Special Civil Application No. 7342 of 2005 and order dated 7.7.2005 in Misc. Civil Application No. 1214 of 2005, wherein similar contention was raised before the High Court by Commissioner of Customs & Ors., the Apex Court upheld the finding of the High Court that it was not possible for the Tribunal on its own to link up two cross appeals unless the said fact was SCA/10110/2006 13/31 JUDGMENT brought to the notice of the Tribunal by the concerned party. It was also observed that since the petitioner had failed in its duty in pointing out the fact that the Department's appeal was pending when the Tribunal took the assessee's appeal for hearing, it was no longer open to the petitioner to turn round and to point a finger at the Tribunal in these circumstances. 10. There is one more aspect of the matter. The learned Counsel for the petitioner has referred to a Xerox copy of the writ carrying interim order made by this Court and stated that the copy has been obtained from the record of the Tribunal. May be. However, it is necessary to take note of the fact that the order under challenge was dated 21.3.2006 and paragraph No. 34[F] of Special Civil Application No. 10110 of 2006 reads as under, which was the ad interim relief granted by the Court on 9.5.2006 : “[F] Pending the admission hearing and final hearing of this writ petition, Your Lordships may be pleased to stay the execution, operation and implementation of the order dated 21.3.2006 rendered by the Gujarat State Cooperative Tribunal in Appeal Nos. 356 and 647 of 2002, in so far as it fixes the liability upon the petitioner as well as be pleased to stay the communication dated 10.3.2006 issued by the Kheda District Central Cooperative Bank Ltd. on the basis of the order dated 11.8.2003 passed by the Registrar, Cooperative Societies, Gujarat State”. SCA/10110/2006 14/31 JUDGMENT Thus, the writ would have gone in the record of Appeal Nos. 356/02 and 647/02, because those are the appeal numbers mentioned in paragraph No.34(F) of petition in Special Civil Application No.10110 of 2006. There is nothing on record to show when the writ was placed on record of the Tribunal. The Tribunal cannot be expected to link the same with the pending appeal of the petitioner unless and until the petitioner invites attention of the Tribunal to the said order which was an order of exparte ad interim relief especially in light of the fact that the Appeal No. 535 of 2002 is captioned in the name of Shri Vijaybhai Fulabhai Patel, who is the first appellant therein, and the petitioner is only one of the other three appellants. Hence, this preliminary contention cannot be the basis for holding that the impugned order of the Tribunal viz. dated 29.11.2006 suffers from any infirmity. Therefore, the preliminary contention made on behalf of the petitioner does not merit acceptance and is rejected. 11. The learned Counsel appearing on behalf of the respondent is justified in referring to the scope of jurisdiction available to this Court in a petition wherein a writ of certiorari is prayed for. The position in law is well settled. The High Court is not required to act as an Appellate Court so as to undertake reappreciation of the evidence on record. The limited scope of intervention that is available to the High Court is where the order of the subordinate Court/Forum is either without jurisdiction or in excess of jurisdiction, or the order suffers from vice of perversity. None of the impugned orders dated 21.3.2006 and 29.11.2006 can be said SCA/10110/2006 15/31 JUDGMENT to be suffering from either want of jurisdiction or excess of jurisdiction vested in the Tribunal, nor is it possible to state that either of the order suffers from vice of perversity. It is equally well settled that merely because the High Court is in a position to record a different finding i.e. different from the one recorded by the Tribunal, on the same set of facts, circumstances and evidence on record, that by itself is not sufficient to vest the High Court with jurisdiction to entertain the petition. Even mere error of law and/or error of fact per se is not sufficient to enable the High Court to exercise the writ jurisdiction. Such an error has to be an error of law which is manifest or apparent on the face of the record. The impugned orders do not suffer from any of such legal infirmities so as to enable this Court to intervene. However, as certain legal issues were raised during the course of hearing the same may be examined in the backdrop of facts on record, only for the purpose of satisfying the conscience of the Court. 12. Section 93 of the Act reads as under : “93. Power of Registrar to assess damages against delinquent, promoters, etc.:- 1. Where, in the course of or as a result of an audit under section 84, or an inquiry under section 86 or an inspection under section 87, or the winding up of a society, the Registrar is satisfied on the basis of the report made by the auditor or the person authorised to make inquiry under section 86, or the person authorised to inspect the books under section 87, or the Liquidator under section 110, that any person who has taken any part , in the organization or management of the society or any deceased , or past or present SCA/10110/2006 16/31 JUDGMENT officer of the society has, within a period of five years prior to the date of such audit, inquiry, inspection or order for winding up, misapplied or retained, or become liable or accountable for, any money or property of the society, or has been guilty of misfeasance or breach of trust in relation to the society, the Registrar or a person authorised by him in that behalf may investigate the conduct of such person or persons and after framing charges against such person or persons, and after giving a reasonable opportunity to the person concerned and in the case of a deceased person to his representative who inherits