SCA/6482/2007 1 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6482 of 2007 With SPECIAL CIVIL APPLICATION No. 8968 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE M.S.SHAH and HONOURABLE MR.JUSTICE H.B.ANTANI ================================================= 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 ? ================================================= SHRUTBANDHU H. POPAT - Petitioner(s) Versus STATE OF GUJARAT & 299 - Respondent(s) ================================================= Appearance : MR TUSHAR MEHTA for Petitioner(s) : 1, MR MIHIR JOSHI ADDL. ADVOCATE GENERAL with MS TRUSHA PATEL ASST. GOVERNMENT PLEADER for Respondent(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 1 - 5. MR BS PATEL for Respondent(s) : 4 - 5. MRS RANJAN B PATEL for Respondent(s) : 4 - 5. DS AFF.NOT FILED (N) for Respondent(s) : 6, MR PS CHAMPANERI for Respondent(s) : 6 - 7. NOTICE NOT RECD BACK for Respondent(s) : 7, None for Respondent(s) : 8 - 300. ================================================= CORAM : HONOURABLE MR.JUSTICE M.S.SHAH and HONOURABLE MR.JUSTICE H.B.ANTANI Date : 11/05/2007 CAV JUDGMENT (Per : HONOURABLE MR.JUSTICE M.S.SHAH) SCA/6482/2007 2 JUDGMENT These petitions under Article 226 of the Constitution challenge the resolution dated 20.1.2007 passed by the Agricultural Produce Market Committee, Kalavad (for brevity “APMC” or the Market Committee”) for granting trader's licences to 293 persons which would have the effect of including them in the voters' list for constituency called the traders holding general licences under clause (ii) of sub-section (1) of Section 11 of the Agricultural Produce Market Committee Act, 1963 (for brevity “the Act” or “the APMC Act”). The petitioners have mainly contended that the new licences were issued in a surreptitious manner on 20.1.2007 after the Director of Agricultural Marketing and Rural Finance, Gujarat State decided on 10.1.2007 to declare the election program for elections to APMC, Kalavad and the election program was declared on 18.1.2007. It is contended that the issue of licences was not only contrary to the statutory provisions of the APMC Act and the Rules but was also done on such a large scale as to subvert the democratic process by creating artificial majority for the Chairman of the outgoing Committee. 2. The facts leading to filing of these petitions, briefly stated, and as averred by the petitioners are as under :- 2.1 Respondent No.4 - APMC, Kalavad is a market committee constituted under the provisions of the APMC Act. The petitioners are traders holding general licences in the area of the APMC, Kalavad. No person can do business as a trader in the area of the APMC without obtaining a licence under Section 27 of the Act read with Rule 56 of the Agricultural Produce Market Committee Rules, 1965 (for brevity “the Rules”). Different kinds of licences are being issued under the said Rules. The four year term of the APMC is going to be over in June 2007. Out of the 14 elected SCA/6482/2007 3 JUDGMENT members in APMC Kalavad, 8 elected members are not supporting the Chairman of the APMC (respondent No.5) who continues to retain power with the support of five other elected members and three other nominated members (two nominated by the State Government). The Deputy Director and District Registrar, Cooperative Societies who is also a member of the APMC sent the proposed election program to the Director of Agricultural Marketing and Rural Finance by letter dated 10.1.2007 (Annexure A). The Deputy Director and District Registrar of Cooperative Societies (respondent No.3), who is one of the members nominated by the State Government with whose support respondent No.5 is continuing to hold the office of Chairman of the APMC, appears to have informed respondent No.5 about the proposed election program and, therefore, hurriedly and surreptitiously a meeting of the licence sub-committee of the APMC came to be convened on 20.1.2007 vide agenda notice dated 13.1.2007. In the meantime, the Director of Agricultural Marketing and Rural Finance had already issued the election program on 17.1.2007 and sent the same to the APMC on 18.1.2007 (Annexure B). Between 13.1.2007 and 20.1.2007, the APMC started collecting applications for grant of licences from persons who are not genuine traders and most of whom are related to respondent No.5 – the outgoing Chairman of the APMC. At the meeting of the licence sub-committee held on 20.1.2007, Resolution (Annexure C) was passed for granting fresh licences to the applicants in the following categories :- “A” class General licences – 52 new licences “B” class General licences – 56 new licences Vegetable Vendors' A class general licences - 185 new licences 2.2 The traders' licences are issued for one year and the petitioners have given following particulars to show the number of licence holders in the disputed categories in the previous years and SCA/6482/2007 4 JUDGMENT the sudden jump in the number of licences given after 10.1.2007. 2003-04 2004-05 2005-06 2006-07 Total for year 2006-07 01.4.06 to 10.1.07 On 20.1.07 1. A Class gen. Licences 284 264 283 172 52 224 2. B Class gen. Licences 10 10 08 07 56 63 3. Vegetable Vendors' A class gen. Licences 76 92 86 77 185 262 360 366 381 256 293 629 2.3 It is also the petitioners' case that though the resolution of the licence sub-committee states that the applications were received between 25.8.2006 and 20.1.2007, the applications were actually received after 13.1.2007 and that the application fees for getting licences were also deposited after 13.1.2007. This statement is sought to be supported with the balance-sheets of the APMC for the month of December 2006 (no licence fee is received) and January 2007 (licence fees of Rs.33,245/- received) annexures E and F respectively. On the basis of the above resolution dated 20.1.2007, the APMC Kalavad issued licences to 293 persons over and above the 336 persons who were already granted the general licences for traders for all the six categories under Rule 56 for the constituency No.(ii). Their names were included in the preliminary list of voters sent by the APMC to the Election Officer – Cooperative Officer in the office of the District Registrar of Cooperative Societies, Jamnagar (respondent No.4) on 06.03.2007. Hence, Special Civil Application No. 6482 of 2007 came to be filed on 9.3.2007. For the first time the petitioners came to know about issuance of licences to 293 persons and their inclusion in the list SCA/6482/2007 5 JUDGMENT sent by the APMC. 3. After the preliminary voters' list was published on 13.3.2007, the learned Single Judge of this Court granted ad- interim stay on 14.3.2007 and referred the matter to a larger Bench after making the following observations :- “Mr. Patel, learned counsel for the Market Committee and the Chairman of the Market Committee submitted that the affected parties are not joined. The request is reasonable, hence, the petitioner is directed to join the persons who are beneficiaries of the resolution of the Market Committee. Upon hearing Mr. Mehta for the petitioner, Mr. Sunit Shah, learned GP for respondent Nos. 1, 2 & 3, and Mr. Patel for respondent Nos. 4 & 5, it prima facie appears that the sanctity and purity of the election would be disturbed, if the body in power who has to face the election grants new licenses, resulting into creating an atmosphere of artificial majority. Mr. Sunit Shah, learned GP, during the course of hearing submitted that the appeal is preferred by one Salim Mamadbhai & Iqbal Jusabbhai Kacchi before the Director, Agricultural Marketing and Rural Finance, challenging the legality and validity of the resolution passed by the Market committee for grant of the license on the eve of the election. However, the Director has passed the order of issuing notice returnable on 16th March, 2007 and the matter is pending. As such, the aspects of the legality and validity of the Resolution and the license granted, will be considered after the reply is submitted by the other side. But from the list, which has been submitted during the course of the hearing by Mr. Mehta, it prima facie appears that about 40 persons granted licences are close relatives of the Chairman of the Market Committee. Hence, until further orders, the operation of the Resolution dated 20.01.2007 passed by the Market Committee shall remain stayed and suspended. S.O. to 28th March, 2007. It is made clear that the pendency of this petition shall not operate as a bar to the Director in taking appropriate decision in accordance with law in the proceedings of the Appeal. However, the decision, if any, shall not be SCA/6482/2007 6 JUDGMENT implemented without the leave of this Court. Mr. Patel for respondent Nos. 4 & 5 also submitted that any order passed by this Court may affect the process of the election. In my view, the resolution is only under challenge and the consequence that may ensue would follow. The Government Pleader shall communicate the order to the concerned authority.” The learned Single Judge also expressed the view that the matter deserved consideration by a larger Bench and that is how the matter was placed before us. All the affected parties i.e. all the 293 persons who were granted licences by APMC on 20.1.2007 were joined as party respondents and they were served through a public notice published in two leading newspapers having wide circulation in the area i.e. Divya Bhasker Rajkot edition and Fulchhab. With the consent of the learned counsel for the parties, the petitions were finally heard and are being disposed of by this judgment. 4. We have heard Mr Shirish Joshi with Mr Baiju Joshi and Mr Tushar Mehta for the petitioners, Mr Mihir Joshi, learned Additional Advocate General instructed by Ms Trusha Patel, learned AGP for the State of Gujarat, Director of Agricultural Marketing and Rural Finance and the District Registrar of Cooperative Societies as well as for the Election Officer i.e. Authorised Officer & Cooperation Officer (Marketing) in the office of the District Registrar, Cooperative Societies, Jamnagar, Mr BS Patel for APMC, Kalavad and its Chairman and Mr Champaneri and Mr DB Rana for the respondents who were issued licences as per the impugned resolution dated 20.1.2007. 5. Mr Shirish Joshi and Mr Tushar Mehta for the petitioners have urged the following contentions :- SCA/6482/2007 7 JUDGMENT (i) Under the Scheme of the Act and Rules particularly under Section 27 and Rule 56 a licence can be granted only after a person makes an application in the prescribed form with all the details indicating his desire to do business in the specified commodities, the APMC is supposed to make due inquiry about the solvency of the applicant and about his place of business and whether his operations in the market area are likely to further the efficiency in the working of the market. All such inquiries are expected to consume some time and only after proper verification, such applications can be considered by the licence sub-committee for recommending grant of licences and thereafter the APMC itself must pass a resolution for granting licences. In the instant case, the procedure prescribed by the Act and the Rules has not been followed. In fact the petitioners and others came to know about surreptitious grant of such licences only when the APMC sent the list to the Election Officer on 13th March 2007 and, therefore, they were constrained to file the present petitions. (ii) It is submitted that the statutory provisions for holding elections to APMC and particularly the provisions of Rule 28 providing for the remedy to challenge elections to APMC do not confer any jurisdiction on the Election Tribunal to decide the question of legality and validity of the licences issued by the APMC and, therefore, the petitioners do not have any efficacious alternative remedy to challenge the malafide action of the Chairman of APMC who does not enjoy the majority of SCA/6482/2007 8 JUDGMENT elected members of the APMC and who continues to hold the office of Chairman only with the support of three nominated members (two nominated by the State Government) in inflating the number of voters by as many as 293 as against 336 existing licence holders prior to issuance of the election program. (iii) the remedy of filing election petition before the Director of Agricultural Marketing and Rural Finance under Rule 28 of the APMC Rules, 1965 is no remedy, much less equally efficacious remedy compared with the remedy of pursuing the present petitions before this Court under Article 226 of the Constitution. The Election Tribunal hearing the election petition to be filed after declaration of results of election of APMC will only examine the legality or inclusion of persons named in the list of traders holding general licences and once the voter is shown to be holding the general licence for traders, the Election Tribunal will have no jurisdiction to hold any further inquiry. When the general licences for traders are granted by the APMC on the eve of elections or after declaration of the date of elections to APMC, the other persons in the APMC like the genuine traders carrying on their trade within the APMC area and already holding general licences never come to know about grant of such licences to non-bonafide persons until the primary list of voters is published and they are given only 14 days' time to lodge their objections against illegal inclusion of persons in such list. It is also submitted on behalf of the petitioners that since the names of the licence holders granted on SCA/6482/2007 9 JUDGMENT the eve of elections are made known only at the time of publication of preliminary list of voters, no time is left for the genuine traders to challenge the grant of such licences because first a complaint will have to be made to the same APMC which has granted the licence on incomplete or incorrect material and when the APMC does not take any action on such complaint, the aggrieved person has to approach the Director under sub-section (4) of Section 27. All this process is bound to be time consuming and 14 days period between the date of publication of the preliminary list of voters and the date of lodging objections will never be sufficient to get this process completed at the hands of the authorities over which the petitioners have no control whatsoever. It is, therefore, submitted that the provisions in the Act and the Rules for preparation of the voters list for the constituency of traders holding general licences cannot be read in isolation and dehors the relevant provisions in the Act and the Rules regarding grant, renewal, refusal or cancellation of general licences for traders. It is vehemently submitted that if the relevant provisions of the Act and the Rules are not harmoniously construed, the outgoing office bearers of the APMC will get a licence to grant such large number of licences not only to the persons applying without genuine desire or with complete information but also by giving them the power to obtain applications from persons not really carrying on any trade or having any genuine desire to carry on trade but only because they are either related to the outgoing members or because they promise to vote at the elections in favour of the outgoing office bearers of the APMC. It is submitted that if this is permitted, there SCA/6482/2007 10 JUDGMENT will not be any genuine democracy but only manipulations to project artificial majority of the outgoing office bearers of the APMC. Since votes are cast by secret ballot, it will never be known as to in favour of which candidate a person has voted when ultimately that person is found to be ineligible for voting, if at all any such finding could be given and were to be given by the Election Tribunal. (iv) It is also submitted that this Court may construe the provisions of the Act and the Rules so as to further democratic principles and that for this purpose it is also open to this Court to pass appropriate orders to restrain the persons granted licences after issuance of the election notification from participating in the elections. Strong reliance is placed on the decision of the Apex Court in Election Commission of India vs. Ashok Kumar, 2000 (8) SCC 216 and particularly on the observations made in paragraph 28 and and principles laid down in paragraph 32 of the said decision. It is submitted a conscientious approach with overriding effect for strengthening democracy justifies judicial intervention and that this Court would not turn a blind eye to the above glaring facts which have clearly emerged from the record. (v) Apart from giving the comparative figures of the licences in the disputed categories of traders granted by the APMC in the previous three years (2003-04 to 2005-06) as compared to the licences granted before the date of declaration of the elections on 10.1.2007 and the licences granted by the licence sub-committee on 20.1.2007 (quoted in para 2.2 hereinabove), the SCA/6482/2007 11 JUDGMENT learned counsel for the petitioners have also heavily relied on the report submitted by a team of Government officials which was submitted to the District Registrar on 23.3.2007 and the report dated 29.3.2007 of the District Registrar of Cooperative Societies, Jamnagar to the Director of Agricultural Marketing and Rural Finance highlighting that all the 185 persons granted licences in the category of vegetable vendors A class general had obtained such licences for the first time on 20.1.2007 and that none of them had obtained such a licence in the previous years i.e. 2004-05 or 2005-06. It was also highlighted in the said report dated 23.3.2007 that out of the 108 persons granted licences in the category of food grain traders (A and B class general licences) on 20.1.2007, as many as 94 persons were granted licence for the first time and only remaining 14 persons had eralier obtained licence in the year 2004- 05 or 2005-06. The other contents of the said report were also brought to the notice of this Court in support of the petitioners' case that the persons to whom trader's licences were granted as per the impugned resolution dated 20.1.2007 were not bonafide applicants and genuine traders but applications were obtained from a large number of persons by the gate clerk or the daily wager clerk of the Market Committee without such applications having been received by or scrutinized by the Inspectors of the Market Committee. Many of the applications for licences were incomplete without complete addresses and without the names and signatures of witnesses. A large number of applications were received on the same date and were filled in in the same handwriting. The gate clerk purported to have submitted a report dated 20.1.2007 about alleged SCA/6482/2007 12 JUDGMENT scrutiny of the applications for traders licences without obtaining any information about the trade and occupation in the previous years or about any other particulars of the applicants. The District Registrar had concluded that a large number of applications were received in the same period and the procedure for scrutiny and approval of applications and grant of licences reveal lack of care. (vi) Reference is also made to the order dated 4.4.2007 passed by the Election Officer for continuing the names of 293 licence holders in the list of voters, subject to the stay of the licensing sub-committee resolution dated 20.1.2007 granted by the learned Single Judge on 14.3.2007 and also to the final list of voters published on 13.4.2007 with the names of 293 licence holders in the final list of voters in spite of non-approval by the APMC of the impugned resolution dated 20.1.2007 of the licensing sub-committee. It is contended that all these events show mala fides on the part of respondent No.5 as well as the election authority to help respondent No.5 to retain the control over the APMC by subverting the election process. (vii) Reliance is also placed on the following observations made by the learned Single Judge of this Court in Valsad Dist. Central Cooperative Bank Ltd. vs. State of Gujarat, 2003 (2) GLH 459 :- “It is a hard reality and perhaps it would not be out of place to take judicial notice of the things happening in such cooperative societies, which are treated as root-level power points that whosoever, any particular group or body, comes to power, realises that certain class of certain SCA/6482/2007 13 JUDGMENT voters are not going to support at the ensuing election then such group or body in power with a view to see that the genuinely interested class is put into minority, new societies which are rather in the nature of dummy cooperative societies or which are not in any manner interested in the management of the Bank are admitted as members and as a result thereof the number of voters of such type societies would be more in comparison to the societies, which are genuinely interested in the management of the Bank and a consequence thereof, the atmosphere of majority is being created.” 6. Mr BS Patel, learned counsel for the APMC, Kalavad has opposed the petitions and submitted that with the publication of the voters' list the election process has commenced and, therefore, this Court has no jurisdiction to entertain the petitions. Strong reliance is placed on the decision of a Full Bench of this Court in Daheda Group Seva Sahakari Mandali Ltd. 2006 (1) Gujarat Current Decisions 211. Heavily relying on the said decision of the Full Bench, the learned counsel for the APMC has submitted that the language of Rule 28 is wide enough to empower the Election Tribunal to entertain all kinds of disputes pertaining to the elections and that it is open to the petitioners to challenge before the Election Tribunal inclusion of the persons named in the voters list on whatever ground they want to challenge such inclusion, but after the elections are held. It is submitted that there is a complete bar to any interference with the election process once the election process has commenced. It is further contended that once an application is received for grant of licence, the APMC is merely required to verify the identity of the applicant and no further inquiry is necessary and that the APMC was justified in issuing all the 293 licences as per SCA/6482/2007 14 JUDGMENT the resolution of the licence sub-committee passed at the meeting held on 20.1.2007. It is also submitted that by resolution No.10(2) dated 20.8.2005 of the APMC, the power to grant licences under Section 27 is delegated to the licence sub-committee and that such delegation is permissible under Section 25 of the Act. It is also submitted that the petitioners have raised disputed questions of fact about justification for grant of licences and that such an inquiry is not permissible in petitions under Article 226 of the Constitution. It is also stated that the APMC Kalavad or its Chairman did not receive the election program stated to have been sent by the Director on 18.1.2007 and that for the first time the Election program came to be received by the APMC and its Chairman only in February 2007 by which time the Director of Agricultural Marketing and Rural Finance had provided for another program as against the earlier program stated to have been sent on 18.1.2007. Hence, the licences issued on 20.1.2007 were not issued after commencement of the election process. 7. Mr Champaneri and Mr DB Rana for many of the respondents who were granted licences as per the licence sub- committee resolution dated 20.1.2007 have supported the submissions of Mr Patel for APMC. 8. As far as the authorities are concerned, Mr Mihir Joshi, learned Addl.