Case: Vineshkumar Mavjibhai Parmar Vs. Dethali Gopalak Vividh Karyakari Sahakari Mandali Ltd.

1. All these eight appeals are preferred by the unsuccessful respondents in various special civil applications (writ petitions under Article 226 of the Constitution) before the High Court of Gujarat at Ahmedabad disposed of by a common judgment dated 17.3.2015.9 of the MARKETS ACT contemplates the establishment of a "Market Committee" for every "market area". Both expressions are defined under Section 2(xiii) and 2 (xiv) (Section 2 (xiii) "market area" means any area declared or deemed to be declared to be a market area under this Act; Section 2(xiv) "market committee" means a market committee established or deemed to be established under this Act;]Section 10 of the MARKETS ACT declares market committees to be bodies corporate with perpetual succession and a common seal. Section 11 stipulates that every market committee shall consist of 17 members falling into 5 categories. Section 11(1)(i) stipulates that eight agriculturist members shall be elected by an electoral college consisting of the members of the managing committees of the "co-operative societies dispensing agricultural credit" (hereafter CREDIT SOCIETIES) in the market area.Section 11(1)(i) of the MARKETS ACT reads asagriculturists who shall be elected by members of managing committees of co-operative societies (other than co-operative marketing societies and milk produce co-operative societies) dispensing agricultural credit in the marketThe activity of co-operative societies in the State of Gujarat is regulated by the SOCIETIES ACT. Section 107 of the SOCIETIES ACT provides for the liquidation and winding up of the societies functioning under the Act. Section 107(1) authorises the Registrar to pass an interim order directing a cooperative society to be wound up for any one of the reasons specified in clauses (a), (b) and (c) of Section 107(1). Sub-Section(3), thereof authorises the Registrar to pass a final order after granting a hearing to the society against which an interim order under sub-Section(1) is made. Such a final order could be one either finally winding up the society by confirming the interim order or vacating the interim order passed earlier, whichever is appropriate in law having regard to the facts and circumstances of the case.5. In exercise of the power under Section 107 of the SOCIETIES ACT proceedings were initiated by the Registrar (Section 2(17) of the Gujarat Co-operative Societies Act, 1961 - "Registrar" means a person appointed to be the Registrar of Co-operative Societies under this Act; and includes to the extent of the powers of the Registrar conferred on any other person under this Act, such person and includes an Additional or Joint Registrar;]) against eleven Co-operative societies (established for the purpose of dispensing agricultural credit) operating in the market area of a market committee known as SIRPUR market committee, the details of which are not necessary for the present purpose.6. We are concerned with only eight of the eleven co-operative societies mentioned above. Admittedly, with reference to each of the said eight co-operative societies, interim orders were passed initially under Section 107(1) (Section 107 Winding up - (1) [Except as otherwise provided in sub-section (1A) if the Registrar, --(a) after an inquiry has been held under section 86, or an inspection has been made under any of the provisions of sub-section (8) of section 84, section 87 or section 88 or on the report of the auditor auditing the accounts of the society, or](b) on receipt of an application made upon a resolution carried by three-fourths of the members of a society present at a special general meeting called for the purpose, or(c) of his own motion, in the case of a society which -(I) has not commenced working, or(ii) has ceased working, or(iii) possesses shares of members deposits not exceeding five hundred rupees, or(iv) has ceased to comply with any conditions as to registration and management in this act or [the rules or the bye-laws, or](v) has failed to comply with any directions issued under sub-section (1) of Section 160 or such directions as modified under sub-section (2) of that section.]is of the opinion that a society ought to be wound up, he may make an interim order directing it to be wound up.]) of the SOCIETIES ACT directing them to be wound up. Subsequently, final orders directing the winding up of each one of the said cooperative societies were also passed.The said orders were challenged before the Appellate authority. The matters eventually reached the High Court, complete details of the litigation may not be necessary except to say that the High Court had set aside the final orders with a further direction to the Registrar to conduct an inquiry afresh under Section 107 of the SOCIETIES ACT and pass appropriate final orders. Admittedly the said enquiry is pending.7. Elections to the SIRPUR market committee fell due in the year 2015. A voters list (under Rule 7 of the Gujarat Agricultural Produce Market Rules, 1965) came to be prepared consisting the names of the members of the managing committee of the above-mentioned 8 cooperative societies (alongwith other societies) operating within the market area of the SIRPUR market committee.8. In view of the pendency of the liquidation proceedings, objections for the inclusion of the names of the members of the managing committees of the 8 cooperative societies were raised. Objections were upheld by the proceedings dated 26.2.2015 of the Additional Registrar and Co-operation Officer (Market), Patan, directing the deletion of the names of the members of the managing committee of the above-mentioned 8 cooperative societies (We take the facts of the first respondent society in Civil Appeal No. 3891/2015 as representative facts of the 8 appeals.]). Operative portion of the order dated 26.2.2015 w.r.t. one of the 8 societiesMr. H.G. Rawal, Authorized Officer & Co-operation Officer [Market], Patan & in exercise of the powers conferred in me and as per the provisions of the Gujarat Agriculture Produce Market Committee Act, 1963 and Market Committee Rules, 1965 allow the application by the objector Mr. Parmar Vineshkumar Mavjibai and Prajapati Manishbai Khemabhai for deleting the names of the Managing Committee members of the Shri Kalyana Group Gopalak Vividh Karyakari Sahkari Mandali Ltd. at Kalyana, Taluka Siddhpur from the Agriculturist constituency voters list and accept the just and proper objections raised, and in the voters list Sr. 259 to 279 voters names are ordered to be deleted. The said orders will be subject to the orders passed by the Hon. High Court and Additional Registrar[Appeal], Co-operative society, Gujarat State, Gandhinagar.-sd-[S.G. Rawal]Additional Registrar &Co-operation OfficerAggrieved by such a decision, the members of the managing committee of the said society filed special civil applications invoking Article 226 of the Constitution of India. By the judgment impugned in these appeals, the special civil application was allowed setting aside the orders of the Additional Registrar dated 26.2.2015.

Court's reasoning:
24. The legislature of Gujarat by Section 11(1) of the MARKETS ACT conferred on the OFFICERS of a class of CREDIT SOCIETIES an additional function of electing members of the market committees. Such function is neither conferred on the OFFICERS of all the societies functioning under the SOCIETIES ACT nor such function includes the right to elect every member of the concerned market committee. Such a function obviously creates a right in the officers of the societies. Such a statutory right could not be taken away in the absence of any express authority of law.25. The Gujarat legislature expressly provided under the SOCIETIES ACT for the curtailment of certain rights of the officers of societies facing liquidation proceedings. It must be remembered that at the same time it also declared that such OFFICERS cease to be the officers of the Society only when a final order of winding up is passed. In a given case if the Registrar after an appropriate enquiry following the interim order of winding decides not to finally wind up the society, the OFFICERS of the society would once again be entitled to exercise all the rights associated with it and perform all the functions attached to the office. Therefore, merely because the officers of CREDIT SOCIETY facing liquidation are disabled from enforcing certain rights attached to the office or perform certain obligations appended to the office, it does not necessarily follow that they are disabled from performing every function entrusted by law to such office.We are of the opinion that the phrase "co-operative societies dispensing agricultural credit in the market area" in Section 11(1)(i) of the MARKETS ACT is only descriptive of the purpose for which the societies are established. Section 11(1)(i) cannot be construed as imposing an incessant obligation of "dispensing agricultural credit" in order to enable the members of the managing committee of CREDIT SOCIETIES to participate in the election to the market committee. The obligation, if any, to "dispense agricultural credit" arises under the bye-laws of the society subject of course to the availability of funds and various other factors. We are of the opinion that the above quoted words are only descriptive of the class of society the members of whose managing committees are entitled to participate in the election of the market committee. It is obvious from the language of the sub-section that there can exist more than one class of co-operative societies functioning under the Act. The very fact that the legislature took care to expressly exclude members of the managing committees of two classes of societies i.e. "Co-operative Marketing Societies" and "Milk Produce Co-operative Societies", definitely indicates that there can exist more than one class of societies - apart from the common knowledge.Credit Societies against which there is an `interim order of winding up are temporarily debarred from dispensing agricultural credit, by virtue of the operation of law. The embargo imposed by such interim order may or may not fructify into a final order of winding up. (We have already discussed this aspect of the matter at para 21 supra). On the face of such possibility of the society resuming its activity of "dispensing agricultural credit" - to debar its managing committee members from discharging their statutory obligation under the MARKETS ACT would be productive of public mischief. Such an interpretation of the statute must be avoided.