IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 15345 of 2004 For Approval and Signature: HON'BLE MR.JUSTICE K.M.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- NATWARLAL PITAMBARDAR PATEL Versus A.B.TRIVEDI -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 15345 of 2004 MR B.S.PATEL, FOR MR CHIRAG B PATEL for the Petitioner MR AD OZA, GOVT. PLEADER for Respondent No. 1 MR SK JHAVERI, SR.ADVOCATE for Respondent No. 2 MR PK JANI for Respondent No. 3 -------------------------------------------------------------- CORAM : HON'BLE MR.JUSTICE K.M.MEHTA Date of decision: 17/03/2005 C.A.V. JUDGEMENT 1. Natwarlal Pitambardas Patel, petitioner, has filed this petition with a prayer that this Court may issue a writ of mandamus or any other appropriate writ, order, or direction quashing and setting aside the order passed by respondent No. 1 dated 25.11.2004, rejecting the nomination paper of the petitioner as per the proceedings at Annexure-A to the petition and direct respondent No. 1 i.e. Election Officer & Deputy Collector to declare the petitioner as elected Chairman of respondent No. 2 bank i.e. Mehsana District Central Co-operative Bank Ltd., Mehsana. 1.1 The petition was filed on 29.11.2004. This Court (Coram: Jayant Patel, J) issued notice on 2.12.2004. Pursuant to the said notice on behalf of respondent No. 1 Mr. A.D. Oza, learned Government Pleader appears. Mr. S.K. Jhaveri, learned sr. advocate, appears on behalf of respondent No. 2 and Mr. P.K. Jani, learned advocate, appears on behalf of respondent No. 3 i.e. Shri Nitinbhai Ratilal Patel. On the joint request of the learned counsel for the parties, I have taken up the matter for hearing. Hence Rule. The learned counsel for the respondents waive service of Rule. 2. The facts giving rise to the petition are as under: 2.1 The petitioner is a leading cooperative worker. The petitioner is connected with many other cooperative societies right from the village level to national level. It is the case of the petitioner that a criminal complaint had been filed in Visnagar Police Station by the Visnagar Nagrik Sahakari Bank Ltd. against one Shakalchand Castor Complex Co-operative Society. The petitioner was the director of the said society. So the petitioner had also been shown as an accused. After thorough investigation the police submitted the charge-sheet and made the report to the learned Judicial Magistrate First Class, Visnagar that the petitioner is not directly involved either in conspiracy or in any other offences but as the petitioner was directed and had not prevented other directors in mismanaging the affairs of the society, hence the petitioner has also been prosecuted for the offences punishable under Sections 406, 420, and 114 of the I.P.C. 2.2 It is the case of the petitioner that (Nitinbhai Ratilal Patel), respondent No. 3 sent an application on 12.10.2004 to the Election Officer and Deputy Collector, Mehsana District, (respondent No. 1) informing him to get the petitioner arrested at the time of filing of nomination paper by the petitioner, failing which, respondent No. 1 shall be held responsible. 2.3 It is the case of the petitioner that respondent No. 1 has rejected the nomination paper of the petitioner on the ground that the petitioner has been served with the notice under Section 110(h) of the Act by the liquidator of the Visnagar Nagrik Sahakari Bank Ltd. While in fact, the notice has been issued to the society and guarantors and copy of the same has been forwarded to the petitioner as a director but, till today, the liquidator has not determined any amount against anyone. 2.4 Being aggrieved and dissatisfied with the said action, the petitioner approached this Court by filing Special Civil Application being Special Civil Application No. 14146 of 2004 challenging the rejection of nomination paper. This Court (Coram: M.R. Shah, J) rejected the Special Civil Application on 26.10.2004 on the ground that the petitioner has alternative efficacious remedy provided under law by way of filing Election Petition under Section 145U of the Act which provides disputes relating to elections to be submitted to the Tribunal. 2.5 It is the case of the petitioner that the petitioner has also been nominated as director in respondent No. 2 bank by the Gujarat State Co-operative Bank Ltd. and under the provisions of bye-law 32 read with bye-law 33, the petitioner is entitled to vote and contest the election for the post of Chairman and Vice Chairman of respondent No. 2 bank. 2.6 It is the case of the petitioner that respondent No. 2 Bank issued an agenda on 25.11.2004 for holding election under Section 145Z of the Act which provides special provision for election of officers of specified societies. The learned counsel for the petitioner has invited my attention to the notice dated 11.11.2004 issued by Mehsana District Central Co-operative Bank, Mehsana. A meeting of Mehsana District Central Co-operative Bank Ltd. - newly elected members of the Board meeting was fixed on 25.11.2004 for conducting the following items: (i) To elect the President of the Governing Body of Mehsana District Central Co-operative Bank Ltd. (ii) To elect the Vice President of the Governing Body of the Mehsana District Central Co-operative Bank Ltd. 2.7 In view of the same, the learned advocate stated that Gujarat State Co-operative Bank Ltd. and the petitioner filed Lavad Case No. 1939 of 2004 on 24.11.2004 and the Board of Nominee granted ad-interim stay in favour of the Gujarat State Co-operative Bank Ltd. as well as the petitioner to the effect that respondent Nos. 1 and 2 may not prevent the petitioner from participating and contesting the election in the meeting dated 25.11.2004 and on subsequent meeting i.e. for election for the Chairman and Vice Chairman. The said interim order was granted upto 29.11.2004. The Court issued notice returnable on 29.11.2004. 2.8 It is the case of the petitioner that respondent No. 1 at the instance of respondent No. 3 - Ex-Finance Minister of BJP ignored the order passed by the Board of Nominee and did not obey the order and permitted the petitioner to cast the vote by misinterpreting the bye-law No. 32(7) which is produced at Annexure-E to the petition and rejected the nomination paper of the petitioner as well as other candidate which was not the valid nomination paper and postponed the election. 2.9 Being aggrieved and dissatisfied with the aforesaid action, the present petition was filed on 29.11.2004. 3.0 During the pendency of the petition, the petitioner has sought for amendment of the petition on 2.12.2004 and the amendment has been granted. 3.1 It is the case of the petitioner that in a judgement in the case of RASIKLAL VS. KAILASGAURI reported in (1971) 12 GLR 355 a Division Bench of this Court (Coram: P.N. Bhagwati, C.J. (as he was then) and D.A. Desai, J (as he was then)), in para 25 on page 376 it appears that the Division Bench has considered the position of registrar, and Mr.Patel, learned advocate for the petitioner stated at Bar that the Division Bench has called upon late Shri J.M.Thakore, who was learned Advocate General at the relevant time, and he has made a statement ( same is no part of the judgment of the Division Bench), however, it appears that some statement on behalf of the Government has been recorded and thereafter the Division Bench has observed in para 25 on page 376 as under: "As a matter of fact we are told that now a policy has been adopted by the State Government to appoint a board of nominees consisting of retired Judges to decide disputes referred to the Registrar. This is a very healthy step taken by the State Government and we have no doubt that it will go a long way towards restoring the confidence of the public in the fairness, efficiency and purity of administration of justice under the special procedure provided by the impugned sections which by reason of ill-considered appointments of nominees in the past was badly shaken. The absence of prescription of minimum qualification to be possessed by a nominee does not in the circumstances have the effect of making the machinery of adjudication unreasonable." 3.2 It is the case of the petitioner that in spite of assurance given to this Court, the Joint Registrar is working as Nominee and all are subject to the transfer at the instance of Government. It has been alleged that present party in power is deadly against the petitioner right from the election of GUJCOMASOL and Mehsana District Co-operative Union. The present party in power tried to prevent the petitioner from being elected. However, the petitioner has been elected unanimously. With the help of respondent No. 1 they could succeed in preventing the petitioner from occupying the post of Chairman of respondent No. 2 Bank, otherwise the petitioner would have been declared uncontested hence even though alternative efficacious remedy provided under Section 96 of the Act is available, it has become illusory for the petitioner. So the petitioner has got no such alternative remedy which is illusory so he has no reasons except to file the present petition. 3.3 It is stated that the present Nominee at Mehsana before whom the petitioner has to file Lavad Case under Section 96 of the Act is Mr. A.B. Gadhavi against whom the petitioner has filed contempt proceedings and on the strength of the order passed by this Court in the contempt proceedings he has to remain present. Mr. A.B. Gadhavi, Mr. K.H. Rathod and Mr. Kaushik Joshi all had worked with respondent No. 2 bank which clearly reveals that if the petitioner is approaching the Nominee under Section 96 of the Act, he will have to go from pillar to post and the petitioner would not be in a position to get substantial justice. 3.4 It is further submitted that independence of judiciary is basic feature of the Constitution of India and in order to ensure impartial and meritorious appointment, the control over such appointment is vested in the High Court as provided under the provisions of Article 235 of the Constitution of India. As directed under Chapter VI and more particularly, Article 233, 234 and 235 of the Constitution of India, it was submitted that neither in appointment of Board of Nominee nor in appointment of the Tribunal the provisions of Chapter VI including Articles 233, 234 and 235 of the Constitution are complied with. In order to secure independence of the nominee and the tribunal the basic requirement is the security of the tenure and other service conditions. The members of the Board of Nominee are appointed only from the Co-operative Department who are either Class III or Class IV employees of the Co-operative Department of the State Government and they are interchangeable and under the control of the Co-operative Department. In the appointment of the President of the Tribunal or the Members of the Tribunal no security regarding the tenure of the service or other service conditions are provided. The Presidentship of the Tribunal is offered to retired District Judges on the basis of the tenure as per the pleasure of the Government or maximum for a period of one year. Mr. Jadav, retired Joint District Judge who has been appointed as President of the Tribunal is given appointment only for a period of one year. Other two Members of the Tribunal are Class I Officers of the Co-operative Department and they are interchangeable and under the control of the Co-operative Department. Such Members can hardly function as independent Members in view of the fact that they are employees of the Co-operative Department. 3.5 It is stated that in the year 1981, radical changes were made in the Act by introducing Act No. 6 of 1981 providing for Specified Co-operative Societies and the Election disputes regarding the management of such specified co-operative societies to be referred to the State Government. However, subsequently, it was realised that entrusting the adjudicative machinery to the State Government for election disputes is unconstitutional, amended Section 145U of the Act by substituting the word "Tribunal" in place of "State Government". It was submitted that though the aforesaid amendment was made with an intention to create independent machinery for adjudication of the election disputes, the aforesaid purpose is frustrated by the appointment of the Tribunal in a manner violative of the very concept of independence of judiciary. 3.6 The learned counsel for the petitioner has invited my attention to Section 74C of the Act which provides for provision for conduct of elections of committees and officers of certain societies and term of office of members of committees. The said Section provides that election of members of the committees and of the officers by the committee of the societies of the categories mentioned below shall be subject to the provisions of Chapter XI-A and shall be conducted in the manner laid down by and under that Chapter - one of the societies is all District Central Co-operative Banks and therefore the provisions of the said Section will be applicable to the petitioner society. The learned advocate for the petitioner therefore invited my attention to Chapter XI-A which provides elections of Committees and Officers of certain societies. The said Chapter contains Section 145A which provides application - all sections of this Chapter except Section (145Z) shall apply to elections to committees of societies belonging to the categories specified in Section 74C. Section 145B provides definitions. Section 145B(b) defines "election" which means election of a member or members of the committee of a specified society. Clause (c) of Section 145B provides "specified society" which means a society belonging to any of the categories specified in Section 74C. Section 145C of the Act provides time when election to be held. Section 145D of the Act provides conduct of elections. Section 145F of the Act provides disqualification for membership. Section 145U of the Act provides disputes relating to elections to be submitted to the Tribunal. Section 145U(1) reads as under: "Notwithstanding anything contained in Section 96 or any other provisions of this Act, any dispute relating to an election shall be referred to the Tribunal." 3.7 Section 145Y provides power to make rules for purposes of this Chapter. Section 145Z provides special provision for election of officers of specified societies. Section 145Z reads as follows: "(1) This section shall apply only to election of officers by members of committees of societies belonging to the categories specified in Section 74C. (2) After the election of the members of the committee or whenever such election is due, the election of the officer or officers of any such society shall be held as provided in its bye-laws, but any meeting of the committee for this purpose shall be presided over by the Collector or an officer nominated by him in this behalf." 3.8 Rule 78 of the Gujarat Co-operative Societies Rules, 1965, provides regarding the qualification and other conditions of the Members of the Tribunal. The aforesaid Rule nowhere prescribes the tenure of the service either of the President or of the Members of the Tribunal. It is submitted that the provisions of the Act and the Rule nowhere guarantee independence of judiciary which is a basic feature of the Constitution of India. 3.9 The learned counsel for the petitioner states that The Mehsana District Co-operative Bank Ltd., Mehsana, has enacted bye-laws. Out of that bye-law 32(1) which provides for Board of Directors, bye-law No. 33(1) provides election of the society and other bye-laws he has relied on. The learned counsel states that the important questions of law in this petition are whether the Presiding Officer under Section 145Z of the Act has any authority to decide the validity of nomination of the candidate, the officer appointed under Section 145Z of the Act is not a Returning Officer, he is only an officer who conducts the matter. It was stated that under the provisions of the Act all members have only one vote and the Presiding Officer has no right to vote. 3.10 The learned counsel for the petitioner has invited my attention to the Gujarat Specified Co-operative Societies Elections to Committees Rules, 1982 particularly, Rule 9 which provides appointment of Returning Officers (hereinafter referred to as "1982 Rules"). Rule 10 provides appointment of Assistant Returning Officer. Rule 13 provides appointment of Presiding Officers and Polling Officers. Rule 15 provides control i.e. the Returning Officer, Assistant Returning Officers, Presiding Officers, Polling Officers and other persons appointed for any of the purposes of these rules shall work under the general guidance, superintendence and control of the Collector. Rule 17 provides manner of publication of order under Rule 16. Rule 18 provides nomination of candidates. Rule 19 provides presentation of nomination paper and requirements for valid nominations. Rule 31 provides uncontested elections. Rule 31 reads as under: "If, after the expiry of the period within which candidature may be withdrawn under sub-rule (2) of rule 25, the number of candidates in the constituency whose nominations have been accepted is equal to or less than the number of seats to be filled, the Returning Officer shall forthwith declare such candidate or all such candidates to be duly elected to fill the seat or the relevant number of seats, as the case may be and shall complete and certify the declaration in Form VII, and where the Returning Officer is not the Collector himself he shall send signed copies thereof to the Collector." 3.11 The learned counsel after referring to agenda and meeting dated 25.11.2004 and order of Board of Nominee dated 24.11.2004, has invited my attention to the order passed by the Additional Secretary, Mehsana District Co-operative Society Ltd., dated 25.11.2004 where the authority has relied on the order of the Board of Nominees dated 24.11.2004 and the application filed by Natwarlal P. Patel and stated that as per bye-law 34(3) application of Natwarlal P. Patel has been declared invalid and therefore he is not entitled to participate in the meeting of Board of Directors. The learned advocate has invited my attention to other provisions of the Act. It has been contended that earlier the Election Officer has passed order dated 23.10.2004 which has been upheld by the High Court where it has been stated that the petitioner can cast vote in the election of Board of apex Bank. The District Registrar, Mehsana District Co-operative Bank has objected to the same. It has been stated that as per the bye-laws and Section 32 of the Act only Natwarlal P. Patel can vote. It has been held that in view of Section 145Z and bye-law 32(1) and 32(7) only elected persons can contest election of Chairman/Vice Chairman. It was stated that Natwarlal Patel has not been nominated and therefore he cannot stand in the election. Therefore, the Tribunal has not accepted Natwarlal Patel as President of the Society. As per the bye-laws the only agenda is for having election of the elected members and there was no other proposal from elected members. The request is therefore rejected. It was further stated that Shri Dahyabhai P. Patel and Leelachandbhai V. Patel were supported by Vithalbhai Madhavlal Patel. It was held that Leelachand V. Patel was elected for three years and till he is elected, the candidature of Vithalbhai Madhavlal Patel is selected. 3.12 The learned advocate has further submitted that under the provisions of section 74-C(3) which starts from Non-obstante Clause "notwithstanding anything in the bye-laws of any society", while Section 145-Z clearly provides "shall be held as provided in its bye-laws". This difference clearly provides that Election of Chairman and Vice Chairman is required to be held as per the provisions of the bye-laws and in the instance case Annexure "E" the Booklet of bye-laws where under the Bye-law No.33(1) (Page No.13) clearly provides that the Directors present in the meeting can elect the Chairman and Vice Chairman and there is no bar for any director in participating in the Election. 3.13 In the Booklet at Annexure "E" to the petition on page no.12, the Bye-law No.32(1)(1A) one representative of Apex Co-operative Bank is required to be nominated and he shall be having the same standard so the same rights and liabilities of a nominated director under the Act. Section 80 of the Act clearly provides that nominated members shall have all rights, duties, responsibilities and liabilities, as if, he were the member of the committee duly elected. The petitioner has been given the status of duly elected director under the bye-laws along with the provisions of section 80 of the Act. In that event, the action of respondent No.1 is apparently against the provisions of the Act and the Bye-laws. 3.14 Section 145-D (4) clearly provides that no election in case of Financing Agency and admittedly Gujarat State Co-operative Bank Ltd. is the financing agency of the Mehsana District Co-operative Bank Ltd. In that event, as the Act does not provide any election but at the same time the Gujarat State Co-operative Bank Ltd. can only nominate its director as nominated director in the Mehsana District Co-operative Bank Ltd. The petitioner is an elected director of the Gujarat State Co-operative Bank Ltd. hence, it can not be said that the petitioner is not an elected director. 3.15 Section 145-A clearly provides that it applies to all sections of the Chapter XI-A except section 145-Z. The election in question is under Chapter XI-A but under Section 145-Z clearly provides, "any meeting of the committee for this purpose shall be presided over by the Collector or an officer nominated by him in this behalf." Hence section 145-Z has conferred only powers to preside over the meeting not of Election Officer or the Returning Officer. The election officer and returning office is clearly provided under section 145-D but the said section is not applicable in the election under sec.145-Z. The Collector have been conferred with the powers for scrutiny of nomination paper and have got right to accept or reject the nomination paper under the provisions of Rule-23 of the Gujarat Specified Co-operative Societies Election to Committee Rules, 1982. The powers are conferred on Returning Officer not on the Collector. Under Section 145-Z no powers have been conferred on Collector and even under the Act and Rules the powers to decide the validity of the Nomination paper is only with the Returning Officer but with no other authority. In that event, the action of deciding the validity of the nomination paper is apparently without jurisdiction by the respondent No.1. 3.16 The petitioner has neither stood as guarantor of the Karmavir Sakalchand Patel Castor Co-operative Society nor he is responsible for the dues of such society. Even though it was brought to the notice of the respondent No.1 the judgment delivered by the Division Bench of this Court (Coram: D.M. Dharmadhikari, C.J. (as he was then) and C.K. Thakkar, J (as he was then) in LPA No.190/1995 in the case of Ahmedabad District Co-operative Bank Ltd. Vs. New Jashpark Co-operative Housing Sty. Ltd. decided on 25.1.2000, without following binding decisions he had rejected the nomination paper of the petitioner. The petitioner approached the tribunal and the tribunal has directed the respondent no.1 to complete the election within 15 days by an order which is on page 82 of the petition but till today the respondent no.2 has not obeyed the order passed by the tribunal. SUBMISSION OF SHRI S.K.JHAVERI ON BEHALF OF RESPONDENT NO.2: 4.0 Mr.S.K.Jhaveri, learned sr. Counsel for the respondent No.2 has supported the case of the petitioner. He has invited my attention to the affidavit of one Ambalal S. Patel dated 29.12.2004, who is