IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 4454 OF 1986 with SPECIAL CIVIL APPLICATION NO. 4555 OF 1993 For Approval & Signature: Hon'ble MR.JUSTICE S.K.KESHOTE --------------------------------------------------------- 1. Whether reporters of local papers may be allowed to see the judgment ? 2. To be referred to the reporters 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? --------------------------------------------------------- UTTAR BHARTIYA NAGAR COOPERATIVE HOUSING SOCIETY LTD. & ANR. VERSUS THE STATE OF GUJARAT & ORS. --------------------------------------------------------- Appearance: (In SCA No.4454/86) MR SK JHAVERI for Petitioners MR SK PATEL for Respondents 1,2,3 MR JAYANT PATEL for Respondents No.4,5 (In SCA No.4555/93) MR SM SHAH for Petitioners MR JAYANT PATEL for Respondent No.1 MR SK PATEL for Respondents No.,2,3,4 --------------------------------------------------------- Coram: MR.JUSTICE S.K. Keshote,J Date of decision:30/12/1999 C.A.V. JUDGMENT #. The Division Bench of the Madhya Pradesh High Court, in the case of Kamta Prasad v. Registrar, Cooperative Societies, reported in AIR 1967 MP PAGE 211, observed: 9. ..... The Cooperative 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 Cooperative movement. Such being the nature of the Cooperative movement, there is no place in any Cooperative Society for any member who is not honest and who, as the Allahabad High Court observed in regard to the applicant, is a `liar', `trickster' and inclined to give false evidence. It is clearly in the interest of the Society that such a member should be expelled therefrom. In our opinion, having regard to the observations of the Allahabad High Court in regard to the petitioner, the Registrar rightly acted under rule 18(2) in expelling him from the various Cooperative Societies of which he was a member" #. The basic principles of cooperation are that the members join as human beings and not as capitalists. The Cooperative Society is 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 cooperation 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 Cooperative Society depends upon the reality with which one of the members work for the achievement of its objects and purpose. The Committee on Cooperation in India emphasized the moral aspect of cooperation, 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 co-operation 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. Though cooperation was introduced in this country as a remedy for rural indebtedness, it has been able to successfully widen range of activities such as production, distribution, banking, civil supplies, marketing, housing and insurance. This movement had got momentum and in the fields aforesaid, it is no doubt working throughout the nation. The aim, object and purpose of this Cooperative movement now to certain extent turns out as if it is to provide platform to the ambitious persons to have their political gains or some other gains. To certain extent, if we go by the facts of this case, then cooperation movement in housing has, by and large, became a business and that is the reason that whosoever have been elected as the office bearer of such Cooperative societies, are making all the efforts to keep control over it once for all. This character of the members of such Society in fact gives out that the sole consideration now is not of ethical and equity for promotion of economic interest of each member but interest and promotion of economic interest of the office bearers in the Cooperative societies. #. These two cases are clearly exhibiting how the persons who promote Cooperative Housing Society for providing houses to its members have made all the attempts to keep control over the Society. This approach of the petitioners in this case is not ethical nor it is providing equality in promotion of economic condition of the members of the Society. Not only this, foremost requirement in the Society to have democratic setup therein an attempt has been made by petitioners to act contrary to what the Society has accepted to act. #. Not only this, the petitioner has not come with clean hands before this court and though throughout the proceedings it was not his case that the papers, documents and other record of the Society is not with him a somersault has been taken and an argument has been advanced in these proceedings that the record of the Society was not with him. #. As both these petitions have been filed by one person and proceed on the same facts and grounds, though two different orders of the authority, under the Cooperative Societies Act, 1960, are under challenge therein and the learned counsel for the petitioners and respondents have also said that these matters may be heard together and this court has also ordered for hearing these two matters together the same are being taken for hearing together and are being disposed of by this common order. #. The petitioner has not only acted contrary to the object and purpose for which this Cooperative housing Society has been constituted and registered under the provisions of the Cooperative Societies Act, 1961, but as a result of his acting in the aforesaid manner, it is resulting in manifold litigations before the civil court, this court and Nominees of the Registrar of the Cooperative Societies and the State Government. When the petitioner has failed to get his place in the management of the Society and also in the civil court to get injunction, he has to give the record of the Society to the office bearers of the Society. Not only this, when the authority, the District Registrar, Cooperative Societies, Ahmedabad, passed the order against him, instead of complying with that order, he has challenged that order before the higher authorities and ultimately in this court. The petitioner was in possession of the record of the Society on which there cannot be raised any dispute though now his counsel is making a statement contrary to the admission of the petitioner. Immediately on passing of the order by District Registrar, Cooperative Societies, Ahmedabad, first and foremost step of the petitioner would have been to deliver the record of the Society to the office bearers of the Society. #. Special Civil Application No.4454 of 1986 was admitted by this court on 30th September, 1987. For the reasons recorded in the order, this court has declined to grant interim relief in favour of petitioner. The order of this court of the date aforesaid reads as under: Rule. Heard the parties with regard to interim relief. For the following reasons the interim relief is refused: The challenge to the order annexure-D dated June 3, 1989 is a stale one, while in respect of challenge to the other orders the petitioners have lost before all the three authorities exercising powers under the relevant provisions of the Gujarat Cooperative Societies Act. However, on account of certain technical contentions raised in the petition, the petition is required to be admitted. In the facts and circumstances of the case I do not think that any prejudice will be caused to the petitioners if the petitioners hand over the records as directed by the Registrar in his order annexure-A dated April 5, 1982. It si also directed that further proceedings of criminal case No.2621 of 1982 pending in the court of Metropolitan Magistrate, Ahmedabad, may proceed upto the stage of pronouncement of judgment and order. However, the judgment and order that may be delivered shall be communicated to this court immediately and shall not be implemented without the permission of this Court. #. If we go by this order, it also no more remains in doubt that the record of the Society was with him. This order has been passed in presence of the advocate of the petitioner and in case the record of the Society would not have been with the petitioner, this fact would have been brought to the notice of the court then and there. The petitioner has not handed over as what this court has expected from him, the record of the Society to the office bearers of the Society. The matter has been decided against the petitioner way back in the year 1982 and all the three authorities have decided the matter against him, but the record of the Society has not been given by the petitioner. Not only this, a criminal case has also been registered against the petitioner but still he has not bothered and he kept the record with him. I fail to see once the petitioner who had been the Secretary of the Society was not elected as its office bearer, any justification in his act to retain the record. Serious allegations are made during the course of arguments by the learned counsel for the respondents that the record was not given by petitioner deliberately. As the Secretary of the Society, what it is contended, he made bungling and Society's money has been misapplied or possibly misappropriated also. Though it is not the matter here to go into and to make investigation or inquiry therein but prima-facie, I find some justification in this contention of the learned counsel for the respondents. If the petitioner would have been a fair and honest Secretary, and acted ethically while managing the affairs of the Society, there could not have been any objection, hitch or reason to withhold this record. A fair, honest and ethical member of the Society who has associated with it as an office bearer of the managing committee as a Secretary on his being lost in the election, should have voluntarily handed over the possession of the record of the Society to its office bearer. The petitioner, instead of doing it voluntarily, even after the orders have been passed under Section 75 and 83 of the Act, 1961, has instead of delivering possession of record to the office bearer of the Society, has taken up the matter before the higher authorities and also filed civil suit in the City Civil Court, Ahmedabad. #. The petitioner though has no concern with the Society as office bearer of its managing committee, and though the Society has not passed any resolution to file special civil application No.4454 of 1986, still he joined the Society as petitioner No.1 originally. I fail to see what objection the Society could have against this order of the District Registrar, Cooperative Societies, Ahmedabad. How the Society is concerned with this order. To project the picture as if the Society itself is aggrieved of this order, he has deliberately and purposely without having any authorization to do so, impleaded the Society as petitioner No.1. Impleadment of the Society as petitioner in this petition has been taken to be serious by the court and ultimately it has been transposed as respondent. ##. In the first petition, the petitioner is challenging the orders of the District Registrar, Cooperative Societies, Ahmedabad City dated 3.6.82 passed under Section 75 and 83 of the Cooperative Societies Act, 1961, which has been confirmed by the Registrar of Cooperative Societies in revision and ultimately its order has been confirmed in appeal by the State Government. The petitioner is also challenging the order of the District Registrar, Cooperative Societies, dated 3.6.78 under which he was disqualified to become a member of the Managing Committee of the Society. All these three orders are challenged in this special civil application. Under the orders aforesaid, the petitioner was directed to hand over the record of the Society to the office bearers of the Society. In the second petition, the petitioner is challenging the notice and resolution of the Society whereunder the petitioner was expunged from the membership of the Society and the order of the District Registrar, Cooperative Societies, Ahmedabad, confirming the aforesaid action of the Society and the order which has been passed by the appellate authority and the revision authority confirming the initial order of the District Registrar, Cooperative Societies, Ahmedabad. ##. In both these special civil applications, reply affidavits have been filed. The petitioner has not filed any rejoinder to the reply affidavits and as a result thereof, whatever factual averments made in these replies by the respondent-Society are to be taken to be uncontroverted. ##. To decide these two matters, the facts are to be briefly stated which are as under: Uttar Bhartiya Nagar Cooperative Housing Society Limited, Ahmedabad, is a Cooperative housing Society registered under the Act of 1961 and its Registration no. is GH-3283. The petitioner, at the relevant time was managing the affairs of the Society as a Secretary. One Shri Jogeshwarprasad R. Sharma, since deceased, was the Chairman of the Society. The petitioner and its chairman were ordered to be disqualified as members of the managing committee of the Society under the order dated 3.6.78. I may pause here and state that this order of the District Registrar, Cooperative Societies, Ahmedabad, was not challenged by the petitioner before the appropriate authority nor before the State Government. However, in this writ petition it is challenged after a long delay. This order has been passed on the ground that the petitioner has failed to call Special Annual General Meeting of the Society as required under Section 78(1) of the Act, 1961. It is the case of petitioner that the said meeting was called on 25th August, 1977 and as that meeting was non coram as per the bye-laws the same was held on 1st September 1977 in which not only accounts for the year 1976-77 were approved and 1/3rd members of the managing committee that retired were reelected. In this meeting, as per the case of petitioner, he and Shri Jogeshwarprasad Sharma, since deceased, were reelected as members of the managing committee and the managing committee elected him as the Secretary and to Shri Sharma as the Chairman. It is the case of petitioner that after meeting of 25th August, 1977, the Society received requisition for holding Special General Meeting dated 8th August, 1977, and Special General Meeting was called on 7th September 1977 but the meeting was dissolved as it was non coram. Another requisition dated 18th December 1977 was received. The requisitionists were informed that most of them are defaulters as dues of the Society were not paid by them and they were instructed to pay up the arrears and in the meeting of the managing committee, it was decided to suspend the rights of their membership till they pay the amount of arrears and they were also informed that they are in arrears they cannot exercise the rights of members as provided under the bye-laws and as such, they had no right to requisition the meeting. I may pause here again and submit that this conduct of the petitioner is clearly an attempt to usurp the power, management and control of the Society. The order dated 3rd June 1978 is challenged on manifold grounds. The petitioner has come up with the case that on 5.2.78, Special General Meeting of the Society was held which was illegal and the members elected therein of the managing committee are not legally elected members. The District Registrar,Cooperative Societies on 5-4-78 ordered that the petitioner to hand over the record of the Society to the newly elected members. The District Registrar, Cooperative Societies, Ahmedabad, further ordered on 5.4.82 for seizure of record of the Society purporting to act under Section 78 and 83 of the Act, 1961 against the petitioner and the Chairman, Shri Sharma. This order has been passed with reference to the meeting held on 5th September 1978 and the order dated 3.6.78. The petitioner submits that both these orders are illegal and suffer from manifold infirmities. These orders were challenged by petitioner by filing revision application before the Registrar which came to be rejected under the order dated 28th August 1984. Then matter was taken up in appeal before the State Government and the appeal was also dismissed on 7th May 1985. Hence this special civil application. ##. In the special civil application reference has been made by petitioner to the proceedings which has been initiated by respondents No.4, 5 by filing Arbitration Suit No.390 of 1985, and No.936 of 1984 before the Nominees of the Registrar. These suits have been filed against the petitioner and late Shri Sharma, the Chairman, wherein prayer has been made for permanent injunction restraining the petitioner from managing the affairs of the Society as the Society's office bearers and restraining from calling himself to be the office bearer of the Society. In this suit, application has also been filed for grant of temporary injunction and the same has been granted against the petitioner. Reference has to be made to the Regular Civil Suit No.5174 of 1984 filed by petitioner in the City Civil Court, Ahmedabad, against respondent No.4 and 5 for declaration that respondents No.4 and 5 are not the members of the petitioner-Society and they should be restrained from calling themselves the office bearers of the Society and they should be restrained from acting as members or office bearers of the Society and seeking permanent injunction restraining them from intervening with or disturbing the petitioner and Shri Sharma as office bearers of the Society and also for quashing and setting aside of the action of respondents No.4 and 5 either as member of the Society or as its office bearers by declaration of their actions to be illegal and void. Interim relief has been granted initially which has been reproduced in para-10 of the special civil application. However, the petitioner has not given out the date on which interim relief has been granted. This Specail civil application has been filed by petitioner in this court on 4.11.85. The petitioner has not stated a very important fact in this special civil application that the interim relief granted by the City Civil Court, Ahmedabad, in civil suit filed by petitioner came to be vacated subsequently on 9th August, 1985, i.e. much earlier to the date of filing of this special civil application. This fact has very very conveniently been concealed by petitioner. ##. The Society has, on 12th October 1984, issued an agenda notice for holding general meeting of the Society on 4.11.84 and one of the item therein was of expulsion of the petitioner from the membership of the Society on the ground that he has not paid dues of the Society since long and he is keeping with him unauthorisedly the record of the Society. It is say of the petitioner that this notice was not served upon him. The petitioner then made reference to the notice of Society dated 23.10.84 under which he was given an opportunity to show cause against its proposed action of expulsionof his from the membership of the Society on the grounds of non payment of dues of Society's amounting to Rs.7232=50 and non handing over of the record of the Society. This notice was admittedly received by petitioner. He has sent a telegram and therein raised objection that the meeting is not legally been convened and the person who has called the meeting has no right to call the meeting. A written reply is also stated to be sent. Reference has been made to the Resolution of the Society dated 4.11.84 under which the petitioner was ordered to be removed from the membership of the Society. This resolution was sent for approval of the District Registrar, Cooperative Societies, Ahmedabad, who gave approval under its order dated 29th March 1986. A copy of this order is not produced on the record of the special civil application. Against this order, the petitioner preferred appeal to the Addl. Registrar, Cooperative Societies (Appeal), Gandhinagar, which came to be rejected under its order dated 31st July 1986. The petitioner has taken up the matter in revision which has also been dismissed by the State Government under its order dated 21st April 1987. These orders and resolution of the Society are subject matter of challenge in special civil application No.4555 of 1993. ##. Both these special civil applications have been contested by respondent-Society by filing affidavits as said earlier. ##. Shri S.K.Jhaveri, learned counsel for petitioner in special civil application no.4454 of 1986 contended that all the three authorities have committed error of jurisdiction in passing of the order of seizure of record from the petitioner. Referring to the provisions of Section 75 of the Act, 1961, Shri Jhaveri contended that under this provision the Chairman of the Society could have only directed to hand over the record and for seizing of the record from him and not against the Secretary. It has next been contended