SCA/948/2004 1/8 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 948 of 2004 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 ? ========================================================= RAJENDRA S REDDY - Petitioner(s) Versus ADDITIONAL REGISTRAR (APPEALS) & 4 - Respondent(s) ========================================================= Appearance : MR RAVINDRA SHAH for Petitioner(s) : 1, GOVERNMENT PLEADER for Respondent(s) : 1 - 2. MR BS PATEL for Respondent(s) : 3 - 5. MRS RANJAN B PATEL for Respondent(s) : 3 - 5. MR MEHUL S SHAH for Respondent(s) : 3, MR SURESH M SHAH for Respondent(s) : 3, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 23/04/2008 ORAL JUDGMENT 1. The short facts of the case appears to be that SCA/948/2004 2/8 JUDGMENT the petitioner was served with the notice for expulsion as the member by the respondent No.3 Society on the ground that he has approached to the Court by initiating litigation and therefore, there was wastage of money of the Society and hence, detrimental to the interest of the Society. The petitioner was called upon to explain as to why he should not be expelled as a member of the Society. 2. It is the case of the petitioner that he was not served with the notice and as a result thereof, he could not appear before the General Board whereas, as per the Society, the opportunity was given, but the same has not been availed of by the petitioner. On 31.05.2002, ultimately in the special general meeting of the Society, the Resolution was passed for expulsion of the petitioner as the member. It was sent to the District Registrar for approval. The District Registrar, ultimately, after hearing both the sides, granted approval vide order dated 25.07.2002. The petitioner carried the matter before the higher forum being Additional Registrar (Appeals) by preferring Appeal No.74/02. The said appeal also came to be dismissed on 31.12.2003. It is under these circumstances, the present petition before this Court. 3. Heard Mr.Shah for the petitioner, Mr.B.S.Patel SCA/948/2004 3/8 JUDGMENT for the the private respondents and Ms.Patel, learned AGP for the State Authorities. 4. It is not in dispute that the ground on the basis of which the power exercised under Section 36 of the Gujarat Cooperative Societies Act, ('the Act' for short) is that the petitioner in capacity as the member has approached to various Courts and the proceedings of litigation are initiated and therefore, the Society is made to incur the expenses for facing the litigation and the said ground is treated as detrimental to the interest of the Society by the general body of the Society and on the basis of which, the resolution has been passed by the Society. 5. Section 36 of the Act, which is relevant for the purpose of the present petition reads as under: “Expulsion of members: 1. A society may, by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for the purpose, expel a member for acts which are detrimental to the proper working of the society: Provided that, no resolution shall be valid, unless the member concerned is given and opportunity of representing his case to the general body, and no resolution shall be effective unless it is submitted to the Registrar for his approval and approved by him: Provided further that, the approval or disapproval of the Registrar shall be SCA/948/2004 4/8 JUDGMENT communicated to the society within a period of three months from the date of such submission, and in the absence of such communication the resolution shall be effective. 2. No member of a society who has been expelled under sub-section(1) shall be eligible for readmission as a member of that society, or for admission as a member of any other society, for a period of two years from the date of such expulsion. Provided that, the Registrar may, in special circumstances, sanction the readmission or admission, within, the said period, of any such member as a member of the said society or of any other society, as the case may be.” 6. It is an admitted position that the status of the petitioner was as a member in the Housing Cooperative Society. This Court had an occasion to consider the scope and ambit of the power of the general body of the Society under Section 36 of the Act in a housing cooperative society in case of Gordhanbhai N.Vaghela Vs. Maruti Coop. Housing Society & Ors. reported at 2003(1) GLR 117. It was observed by the Court at para 10 as under: “10. In view of the earlier discussion, I am of the view that in the matter of exercising the power under Section 36 of the Act in a housing cooperative society, the principles of natural justice must be extended to a larger extent with its fullest scope, so that before a person is expelled as a member and the property which is under his possession is taken back by the society, he must be given full opportunity of putting forward his case to the general body of the society. In any case, the society who takes the decision must consider all the aspects which are put forward by the member, including SCA/948/2004 5/8 JUDGMENT the facts and circumstances of the personal convenience/inconvenience and also rather an important fact that a shelter is to be lost by the member concerned when he is expelled as a member of the society in a housing cooperative society by the housing cooperative society. It should also be considered as to whether any other lesser action of imposing penalty or of recovering special cost etc. are possible or not. It appears that power under Section 36 for expulsion can be taken to only as a last resort in a housing coop. society. Therefore, on true consideration of Section 36 of the Act, I am of the view that the principles of natural justice must be applied with its wide aptitude and scope, when the housing cooperative society has to exercise the power of expelling any person concerned as member. It is made clear that it is on account of the particular facts and circumstances in a matter of membership of housing cooperative society I am inclined to take such view.” 7. It is true that in case of recovery of the outstanding amount, when the action for expulsion was taken, the aforesaid observations came to be made by this Court. However, the pertinent aspect is that, as per the view expressed by this Court in the above referred decision, power under Section 36 for expulsion can be taken only as a last resort in a housing cooperative society and it would be required for the society to examine as to whether any other lesser action of imposing penalty or for recovery of any special cost etc., are possible or not? It is an admitted position that there is no consideration on the said aspect by the general body of the Society. 8. Apart from the above, the ground of approaching before the Court by any member of the Society per se cannot be termed as detrimental to the interest of the society. If such is read as SCA/948/2004 6/8 JUDGMENT detrimental to the interest of the society, the basic democratic structure in any cooperative housing society including that of freedom of the member to approach before the Court of law, if any injustice is caused to him would be frustrated. 9. Even otherwise also, in a democratic setup, no citizen would be put to a disadvantageous position, if he or she has approached to the Court of law for seeking justice. If such is curtailed at the entry point, it would adversely affect the system of the administration of justice and consequently, the basic structure prevailing in the democratic setup. Merely because a member has approached to the Court for ventilating his grievances against the office bearers of the Society can hardly be termed as an action detrimental to the interest of the Society. In a given case, if the Court or the forum before whom the member has approached may not accept the contention or may impose the penalty for bringing a wrong cause before the Court or the forum, is a different aspect, but one who is facing the litigation viz. office bearers of the Society cannot create an atmosphere of no opposition whatsoever against any action of them by any of the member. If such power is read under Section 36 of the Act, it would not only curtail the basic freedom of the members of a Society, but it would also be SCA/948/2004 7/8 JUDGMENT against the interest of the cooperative movement in a free and fair atmosphere. Hence, approaching before the Court by any member against the office bearers of the Society cannot be termed as an action detrimental to the interest of the Society and therefore, such ground would be outside the exercise of the power under Section 36 of the Act. 10.If the matter is examined in light of the aforesaid, it is apparent that the general body of the society has exercised the power of expulsion on the ground which is not permissible nor such can be termed as detrimental to the interest of the Society. The aforesaid is coupled with the circumstance that as per the say of the petitioner, he was not served with the notice and had no opportunity to put forward his case before the general body. 11.Under these circumstances, the approval granted by the District Registrar and its confirmation thereof by the Additional Registrar (Appeals) cannot be sustained in the eye of law. Hence, the impugned order passed by the District Registrar and its confirmation thereof by the Additional Registrar (Appeal) deserves to be quashed and set aside with the further declaration that the resolution of the Society for expulsion of the petitioner shall remain inoperative in the eye of law and the rights of SCA/948/2004 8/8 JUDGMENT the petitioner as may be available in law as the member of the Society shall continue to operate. 12.The petition is allowed to the aforesaid extent. Rule made absolute accordingly. No order as to costs. (JAYANT PATEL, J.) *bjoy