SCA/8017/2008 1/13 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 8017 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE K.M.THAKER ========================================================= 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 ? ========================================================= ACHARYA KAMLESHKUMAR SURYAKANTBHAI & 1 - Petitioner(s) Versus REGISTRAR- CO-OPERATIVE SOCIETIES & 2 - Respondent(s) ========================================================= Appearance : MR PS CHAMPANERI for Petitioner(s) : 1 - 2. Mr. JK SHAH, Asst. GOVERNMENT PLEADER for Respondent(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 1 - 3. MR BS PATEL for Respondent(s) : 3, ========================================================= CORAM : HONOURABLE MR.JUSTICE K.M.THAKER Date : 10/06/2008 ORAL JUDGMENT The petitioners have approached this Court with belowmentioned prayers; (A) This Honourable Court will be pleased to issue a writ of mandamus or a writ in the nature of certiorari or any SCA/8017/2008 2/13 JUDGMENT other appropriate writ, order or direction directing respondents nos. 1 and 2 to remove the executive committee of respondent No.3 bank and to appoint Administrator – Custodian for reconstitution of the Committee of the respondent No.3-Society; (B) This Honourable Court will be pleased to issue a writ of mandamus or a writ in the nature of certiorari or any other appropriate writ, order or direction directing respondents No.2 to supersede the executive committee and/or to remove the executive of the respondent No.3 society forthwith and to appoint the officer, administrator or custodian in place thereof; ( C) Pending admission, hearing and final disposal of this petition, an interim injunction may kindly be granted staying the implementation, execution and operation of the impugned resolution and decision dated 10th May 2008 and consequently be pleased to restrain and prohibit respondent No.3 or any of its officers or persons from acting in any manner pursuant to the impugned resolution dated 10th May 2008 in any manner; (D) Pass such other and further orders as may deem fit in the interest of justice. In view of the contention regarding the committee's authority to pass resolution dated 10.5.2008, petition requires to be considered. Hence, Rule. Upon request of the respective Advocates and with their consent, matter is taken up for final hearing and disposal today. SCA/8017/2008 3/13 JUDGMENT 2. The respondent No.3, in present case, is a co-operative bank and as per the provisions contained under the Gujarat Co- operative Societies Act, 1961 [hereinafter referred to as 'the Act'] the respondent No.3 is an urban cooperative bank. According to the submissions of the petitioner, the provisions contained under Chapter X-B of the Act are, therefore, applicable to it. 3. So far as the facts relevant for present purpose are concerned, the petitioners have come out with the case that the respondent No.3, being an urban cooperative bank, is governed by the provisions contained under Chapter X-B of the Act and more particularly by provisions under Section 115-J which, according to the submissions of the petitioners, has overriding effect over other provisions of the Act, rules and bye-laws of the bank. The petitioners have stated that the term of the executive committee of the respondent bank has expired on 31.3.2008 and that therefore there is no power, as per the provision applicable to the respondent No.3 bank, empowering or authorising the members of the executive committee to continue to hold in office even after the expiry of their term. The petitioners have further narrated, in the petition, history of certain past incidents which resulted into litigation in form of Lavad Suit No. 476 of 2005 and 477 of 2005 wherein judgment came to be delivered on 8th May, 2008. It is the case of the petitioners that the legality and validity of the said judgment has been challenged by filing appeals being Appeals No. SCA/8017/2008 4/13 JUDGMENT 199 of 2008 and 200 of 2008 before the Gujarat State Cooperative Tribunal. The petitioners have disclosed that along with the said appeals, application for interim relief also were preferred, however after hearing the parties, the prayer for injunction has been rejected by the learned Tribunal. The petitioners have also made reference of an order dated 12.9.2006 passed by the District Registrar, under Section 23 of the Act. After stating the aforesaid and such other facts the petitioners have stated that now the respondent No.3 has passed a resolution in the meeting held on 10th May, 2008 appointing Election Officer and Assistant Election Officer and thereby the respondent No.3 bank has put in motion the process for election. 4. In background of such facts and submissions, the petitioners have made the above referred prayers. 5. In response to the notice issued by virtue of the order dated 2.6.2008, Mr. BS Patel has entered appearance on behalf of the respondent No.3 bank and Mr. JK Shah, learned AGP has appeared on behalf of the respondents No. 1 and 2. On behalf of respondent No.3 a reply affidavit has been filed wherein various contentions, including objections as regards maintainability of the petition are raised. The respondent No.3 contends, by way of the affidavit, that the petitioners herein have already preferred appeal before the learned tribunal, along with an application for interim SCA/8017/2008 5/13 JUDGMENT stay, and such application for interim relief has been rejected by the learned tribunal by order dated 23.5.2008 and that therefore the present petition, in view of the pending appeal, is not maintainable. It is further contended that if at all the petitioners have any grievance against the respondent No.3 or its functioning or the decision taken during the meeting held on 10.5.2008, then there is an appropriate alternative remedy made available by the statute by virtue of Section 96 and the petitioners can file lavad case under Section 96 and in view of such alternative remedy the petition is not maintainable and does not deserve to be entertained. It is further contended by the respondent No.3 that no case for appointment of custodian is made out and in any case before requesting this court, by invoking Article 226 of the Constitution of India, to appoint custodian and/or to remove the executive committee of the respondent No.3, the petitioner has not approached the authority under the Act, i.e., respondent No.2 and therefore also there is no cause for issuing writ of mandamus as prayed for. Besides the aforesaid submissions, respondent No.3 has submitted that the steps for holding election have already been taken and as a step in that direction a resolution dated 10.5.2008 is passed appointing, unanimously, Election Officer and Assistant Election Officer and that therefore also there is no justification or merits in the subject petition. SCA/8017/2008 6/13 JUDGMENT 6. I have heard Mr. Champaneri, learned advocate for the petitioners and Mr. BS Patel, learned advocate for respondent No.3 and Mr. Shah, learned AGP for respondents No. 1 and 2. Mr. Champaneri has reiterated the contentions stated in the petition and has submitted that all that the petitioners pray is that a direction may be issued for appointment of an administrator or custodian to oversee and/or conduct the election so that the ensuing elections can be held in fair manner under the authority and supervision of independent person. 7. In view of the fact that the resolution dated 10.5.2008 has already been passed, and since the petitioner has not approached respondent No.2 with request for appointment of administrator or custodian or to supersede the committee and as there is no decision by respondent No.2 either granting or refusing such request, granting of such relief at this stage – particularly when resolution dated 10.5.2008 is passed appointing election officer – would amount to undermining the impartiality and independence and authority of Election Officer and that therefore this Court is not inclined to and does not propose, at this stage, to consider or entertain the prayer or to pass an order that the executive committee may be removed or superseded or to direct the respondent No.2 to remove or supersede the Executive Committee. SCA/8017/2008 7/13 JUDGMENT 8. Further, the petitioners have also failed to make out a case that eventualities which would necessitate appointment of custodian or an administrator exist or have now come in existence. Even if it is presumed that such circumstances exist, then also at this stage the prayers of the petitioner do not warrant consideration by this Court inasmuch as before approaching the court with such request the petitioners ought to have approached the respondent No.2 and ought to have made out a case before him for appointment of custodian or an administrator and if only the respondent No.2 failed to pass any order, rejecting the request then the action of the petitioners for preferring the present petition and seeking directions against respondent No.2 would be justified. 9. Even otherwise, as per the provisions under the Act, the circumstances and eventualities on occurrence of which a custodian may be appointed, are provided. Likewise, the Act also contains the provisions prescribing circumstances or eventualities when an administrator may be appointed. The petitioner has failed to show and establish that such circumstances or eventualities have occurred. Besides, it would be for the respondent No.2, in the first instance, to examine the issue and satisfy himself as to whether such need has arisen and if he satisfied, either suo motu or on any representation, then he would take necessary steps as may be considered appropriate. It would be premature and pre-emptive, for the Court, to give at this stage the directions as prayed for. SCA/8017/2008 8/13 JUDGMENT 10. In light of the facts and circumstances narrated by the petitioners and in view of the relief prayed for by the petitioners, it is also not necessary, at this stage, to examine in greater detail the contention of the petitioners that in view of the provisions contained under Chapter X-B and more particularly Section 115-J, the executive committee of the respondent No.3 bank has no authority to continue to hold office because its term has expired and the provision under Section 115-J does not allow the committee and prohibit it to continue to hold the office after expiry of its term. However, suffice it to say that the respondents have not disputed the petitioners' contention that the term of the committee has expired. Instead, the respondents have, come out with the submission that the term of the committee has expired which has necessitated that the 11 posts may be filled in, and for that very purpose the actions for initiating election process have already been taken and as a step in that direction the Election Officer and Assistant Election Officer have been appointed and that therefore there is no substance or merits in the allegations or demand of petitioners. 11. On plain reading of the said provision, namely Section 115-J, it comes out that the provisions under Chapter X-B have an overriding effect over the provisions in the Act or the Rules or the bye-laws of the bank which may be contrary to the provisions under Chapter X-B. Chapter X-B contains Sections 115-B to 115-L. SCA/8017/2008 9/13 JUDGMENT Sections 115-K and 115-L contain the saving clause and transitory provisions respectively while Section 115-J, as noticed above, gives overriding effect to the provisions under this chapter. So far as Section 115-B is concerned, the same contains definitions of the terms 'Bank', 'Committee', 'Committee Member', 'Company', 'Member of a Bank', and 'Urban Cooperative Bank', while Section 115-C prescribes qualifications and disqualifications for being committee members. Section 115-D provides for right to vote. Section 115-E prescribes the functions which the committee must ensure and Section 115-G provides for creation of Credit Equalization Fund. Section 115-H makes provision for taking cognizance and punishment for offences and by Section 115-I provisions under Section 84 are made applicable to specify bank with the modification mentioned in Section 115-I. 12. From the aforesaid, it becomes clear that so far as the controversy or dispute in present matter is concerned, the said provisions, except Section 115-J and thereby Section 115-E,would not have much relevance. 13. This brings in picture the provisions under Section 115- E. As per the said provision, a Chairman or a Vice Chairman or the Managing Director or a Committee are not entitled to hold office continuously for more than 2 terms and can do so only after a hiatus of 2 terms. Thus, if the petitioners want to rely upon and SCA/8017/2008 10/13 JUDGMENT invoke the provisions under Section 115-E against the Committee, then it would be necessary for the petitioners to establish that the Chairman or the Vice Chairman or the Managing Director or the Committee or all of them have been holding office continuously for more than 2 terms. At this stage, it would not be out of place to take note of submissions advanced by Mr. Patel on behalf of respondent No.3 by relying upon the bye-laws of respondent No.3 bank. Mr. Patel relied upon the provisions contained under Bye-law No. 28 which, inter alia, provides that the term of the 11 members of the board shall be of 3 years and upon expiry of such term, the elected members of the existing board shall continue to hold the office until the new elected members take over the charge after election. The said bye-law of the respondent society permit the existing members to continue to hold office until new members are elected. 14. If the petitioners establish the said fact, then only the petitioners can invoke the said provision and press in service the said provision against the said officers or the committee. There is no specific averment in the petition categorically suggesting that any of the members or officers have completed continuous two terms in the office. The petitioners have failed to establish that all or any of the 11 members have completed continuously 2 terms in office and until that is established, the provisions under Section 115-E would not be attracted. Thus, their actions e.g. Passing SCA/8017/2008 11/13 JUDGMENT resolution on 10.5.2008 cannot be held to be without authority. Besides this, the petitioners do not appear to have approached the respondent No.2 with aforesaid facts. 15. Thus, when there is no foundation to attract and/or apply provisions under 115-E, the issue of any of the bye-laws being contrary to the provisions under Chapter X-B would not arise and consequently the question of applicability of Section 115-J also would not arise. The provision under bye-law 28 provides that until the new body is elected, members of the existing body would continue. If in any given case the existing body or any member of the body completes continuously two terms in the office, then certainly the said bye-law, in view of provision under Section 115-E r/w. Section 115-J, would not help such member to continue to hold the office until the new body takes over. However, so long as the said eventuality does not come in picture or is not established, (i.e., so long as it is not established that the existing body or any of its members has completed continuously two terms in office) question of Bye-law 28 being contrary to Section 115-E or the question of 115-E being attracted would not arise. 16. In this view of the matter, it becomes clear that the petitioners have failed to make out the case that the said resolution dated 10.5.2008 is without authority in law. It is also relevant to note that Mr. Patel has pointed out that after the resolution dated SCA/8017/2008 12/13 JUDGMENT 10.5.2008 the election programme is already notified as per which the dates for submitting nominations, verification of nomination, publication of list of candidates/contestants and date for voting have already been notified. As per the said programme, the date for voting is 22.6.2008. The said details bring out that the election process has already commenced and therefore also now there is no justification for this Court to interfere in the matter, much less to now stay the implementation and operation of the resolution dated 10.5.2008. 17. It is pertinent to note that on one hand the petitioners seek that the new body should come in existence because the term of the existing body has expired, whereas on the other hand the petitioners also pray that the resolution dated 10.5.2008 by virtue of which Election Officer has been appointed, may be stayed and the respondent No.3 may be restrained from acting in pursuance of the notification, which would mean arresting the election process. 18. Since this Court has come to the conclusion that the petitioners have not established that the resolution is without authority in law, there is no need to examine other issue or other relief prayed for in the petition, i.e., for appointment of administrator or custodian because by the said resolution dated 10.5.2008 the Election Officer and Assistant Election Officer have been appointed and subsequently under their authority, election SCA/8017/2008 13/13 JUDGMENT programme has also been notified as a result of which election process is in motion. There is no reason or justification to interfere with the said election process and at this stage, even otherwise, in view of the said development, the question of appointment of custodian or administrator would not arise. 19. Further, if the facts are presented before the respondent No.2 and if the respondent No.2 is satisfied either suo motu or upon submissions by the petitioners or any other interested person, that the affairs of respondent No.3 bank require appointment of custodian or an administrator, then it would be for the respondent No.2 to take appropriate decision and action. However, so long as the said exercise is not undertaken, there would be no justification for issuing any direction against respondent No.2 to appoint an administrator or custodian. It would, however, be open for the petitioners to approach the respondent No.2 so as to make out a case before him and satisfy the respondent No.2 that affairs of respondent No.2 bank warrants appointment of an administrator or custodian. 20. In light of the aforesaid discussion and the facts of present case, the petition is not required to be entertained at this stage. Rule discharged. No order as to cost. [ K.M. Thaker, J. ] rmr.