SCA/6243/1997 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6243 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 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 ? ========================================================= BHAVNAGAR DISTRICT CO OP. BANKLTD - Petitioner(s) Versus REGISTRAR & 5 - Respondent(s) ========================================================= Appearance : MR SHIRISH JOSHI for Petitioner(s) : 1, MR SHIVANG SHUKLA, AGP for Respondent(s) : 1 - 2. RULE UNSERVED for Respondent(s) : 3, RULE SERVED for Respondent(s) : 4, 6, MR BM MANGUKIYA for Respondent(s) : 5, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 03/04/2008 ORAL JUDGMENT The short facts of the case appear to be that the petitioner is a Co-operative Bank registered SCA/6243/1997 2/6 JUDGMENT as the Federal Co-operative Bank at the district level. It appears that a show-cause notice came to be issued by the Registrar, Co-operative Societies dated 10th April, 1997 calling upon the petitioner to show cause as to why inquiry should not be ordered to be held under Section 86 of the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as the 'Act') pertaining to 29 loan transactions to ship- breaking and other industries by the Bank. The petitioner, at the initial stage, challenged the legality and validity of the said show-cause notice in the present petition and it was also prayed to quash and set aside the said notice and to restrain the respondents no.1 and 2 from holding any inquiry under Section 86 of the Act. It further appears that the petitioner submitted the reply to the show-cause notice and contended inter alia that the loan transactions are legal and valid and no inquiry deserves to be ordered under Section 86 of the Act. It was also contended that the District Registrar or the representative of the State Registrar is a member of the Managing Committee of the Bank and, therefore, there is no power with the State Registrar to order inquiry under Section 86 of the Act. 1.1 It appears that thereafter, the Registrar, vide order dated 15th September, 1997, considered the matter and found that the Joint Registrar (Finance) has not attended a single meeting of the Managing Committee of the Bank and, therefore, the decision of this court in case of Gujarat State Co-operative SCA/6243/1997 3/6 JUDGMENT Marketing Federation Ltd. would not be applicable and ultimately, it is found by him that it would be just and proper if the detailed inquiry is held for the various loan transactions by the Bank. Therefore, the Inquiry Officer was appointed under Section 86(1) of the Act for inquiring into the aforesaid loan transactions which were referred to in the show- cause notice. The petitioner, by draft amendment, has amended the said final order passed by the Registrar for holding the inquiry under Section 86 of the Act (Annexure 'F'). 2. Heard Mr. Joshi for the petitioner, Mr. Shukla, learned AGP for respondents no.1 and 2 and Mr. Nikhil Vyas with Mr. Mangukiya for respondent no.5. Other parties to the proceedings are served but they have chosen not to appear. 3. The principal contention raised on behalf of the petitioner by Mr. Joshi is that if the inquiry is ordered by the very authority who is a member in the Managing Committee, the same is not permissible and, therefore, he submitted that the order for holding the inquiry under Section 86 of the Act deserves to be quashed and set aside. In support of his contention, he relied upon the decision of this court in case of Gujarat State Co-operative Marketing Federation Ltd., Ahmedabad vs. V.H. Parekh & Anr. reported in 1995 (1)9 GCD Page 649 (Guj.) and he also alternately submitted that even after the show-cause notice, the reply was submitted but without giving SCA/6243/1997 4/6 JUDGMENT proper opportunity to the petitioner, the order has been passed by the Registrar for holding inquiry under Section 86 of the Act. Mr. Joshi also incidentally submitted that when the petition was filed in the year 1987, the Managing Committee who was to face inquiry has now changed on account of subsequent election and as per his information, the respondent no.5 and his group are in the management of the petitioner Bank. Therefore, he submitted that he has no positive instruction as to whether the petitioner Bank deserves to maintain the petition by maintaining the challenge or not. He also submitted that he had intimated to the petitioner Bank but there is no response and, therefore, he has made submissions in accordance with law. 4. Leaving aside the question of change of power in the petitioner Bank whether one elected body or another elected body, if the subject matter of the petition is considered and examined on merits, it appears that the finding recorded by the Registrar while passing the impugned order is that the Joint Registrar has not attended a single meeting of the Board of Directors. Therefore, if he has not participated at the meeting at which the loan transactions were sanctioned, it cannot be said that he will have no authority or competence to order inquiry under Section 86 of the Act. Further, he also mentioned that the Bank is a district level federal Bank and the District Registrar is normally required to attend the meeting and, therefore, he has SCA/6243/1997 5/6 JUDGMENT not accepted the objection raised on behalf of the Bank and the finding recorded is that the decision of this court in case of Gujarat State Co-operative Marketing Federation Ltd. (supra) would not be applicable. 5. In the said decision of Gujarat State Co- operative Marketing Federation Ltd. (supra), it was the case of the petitioner therein that the first respondent who is Joint Registrar of Co-operative Societies, Gujarat State, Ahmedabad attended most of the meetings of the Board of Directors of the petitioner Society during the respective period and at the meeting, no objection was raised. Therefore, in facts of the said case, the view taken by this court was that one cannot be a Judge on his own case. Therefore, it was held that inquiry under Section 86 of the Act cannot be ordered. In the present case, such are not the fact situation. The view taken by the Joint Registrar that the decision cannot be made applicable to the facts of the present case cannot be said as unjust or arbitrary. 6. Further, in any case, at the inquiry which is to be held under Section 86 of the Act, those who are to face the inquiry will have the opportunity of putting forward their case before the Inquiry Officer. Therefore, if the ordering of the inquiry is not with inherent lack of power and competence, it would not be a case for interference by this court under Article 226 of the Constitution, at this stage. SCA/6243/1997 6/6 JUDGMENT 7. The contention of the learned counsel for the petitioner that the order has been passed in breach of the principles of natural justice or that there is no proper opportunity given, cannot be sustained because in the very order, it has been mentioned that after the show-cause notice, the matters were fixed on 15th May, 1997, 4th June, 1997, 27th June, 1997, 24th July, 1997, 7th August, 1997 and 14th August, 1997 and the adjournments were granted at the request of the petitioner Bank. Therefore, if the opportunity is given to put forward the case and when the contention raised in the reply is also considered by the authority, it cannot be said that the order is in breach of the principles of natural justice, as sought to be canvassed. 8. In view of the above, the petition is meritless. Hence, dismissed. Subject to the aforesaid observations, rule discharged. Interim relief, if any, shall stand vacated. No order as to costs. ( Jayant Patel, J. ) hki