STATE OF GUJARAT & 2 Respondent(s) Appearance : MR VIMAL M PATEL for Petitioner(s) : 1 2. GOVERNMENT PLEADER for Respondent(s) : 1, DS AFF.NOT FILED (N) for Respondent(s) : 1 2. NOTICE SERVED BY DS for Respondent(s) : 3, CORAM : HONOURABLE MR.JUSTICE K.M.THAKER Date : 2627/05/2008 ORAL ORDER 1. These petitions arise from common order dated 16.5.2008 passed by Gujarat State Cooperative Tribunal in group of appeals which were preferred against order dated 28.6.2004 passed by respondent No.2. The said order dated 28.6.2004 and dated 16.5.2008 are under challenge in this petition. 2. After hearing the petitioner, notice was issued on 19.5.2008, which was made returnable on 23.5.2008. Mr. P.K. Jani, learned counsel has appeared for Mr. Vimal Patel, learned advocate for the two petitioners in Special Civil Application No.7842 of 2008. Mr. Sumit Shah, learned Government Pleader has appeared for respondent No.1 and 2. Mr. K. G. Vakharia, learned Senior Counsel has appeared with Mr. Tushar Mehta learned advocate for respondent No.3. On 23.5.2008, the parties were heard at length and to enable the petitioners to submit amendment, the hearing was adjourned to today i.e. 26.5.2008. 3 Today, draft amendment has been submitted by Mr. P.K. Jani, learned advocate. Amendment is granted. The petitioners are directed to carry out the amendment within one week. 4. The facts, relevant for present purpose, are follows: 4.1 The petitioners were directors of respondent No.3 bank and the petitioner No.1, at relevant point of time, was Chairman of respondent No.3 bank. The respondent No.3 is a society, registered under the provisions of the Gujarat Cooperative Societies Act, 1961 (hereafter referred to as ýSThe Actýý) and engaged in Banking activities. 4.2 It is the case of the petitioners that a Resolution dated 24.6.1996 came to be passed in the meeting of Executive Committee resolving to invest certain amount in a Company named ýSC.R.B. Capital Marketing Ltd.ýý (herein referred as C.R.B. Ltd.). The petitioners claim that the said resolution was also approved by the Board of Directors in the meeting held on 20.7.1996. In light of the said Resolution, an amount of Rs.4 Crores came to be invested in said C.R.B. Ltd. The decision and resolution to invest in the C.R.B. Ltd. was one of the issues in the proceedings from which present petitions arise. 4.3 The petitioners claim that towards the said investment, the said C.R.B. Ltd. had issued post dated cheques which, on the date of maturity, were not fully honoured inasmuch as, amount of about Rs.3 crore could not be recovered. For the purpose of recovering the amount, a suit was filed and the Civil Court was pleased to pass a decree (ex parte) in favour of respondent No.3 bank, and proceedings under Section 138 of the Negotiable Instruments Act were also initiated. It is, however, relevant to record that the said C.R.B. Ltd is undergoing liquidation proceedings. In short, the petitioners claim that they had taken steps for recovery of the said amount. 4.4 It appears that during the statutory audit for the period from 01.04.1996 to 31.03.1997 and 01.04.1997 to 31.03.1998, certain irregularities, including the aforesaid action of investment in C.R.B. Ltd., were brought out. In addition to the said irregularity, the irregularities mentioned by the auditors in the report also include unjustified and unauthorised expenses towards a tour to foreign country, payment of higher or excessive sitting fees etc. 4.5 The crux of the report is that acts of omission or commission amounting to breach of provisions under the Act e.g. S. 71 and/or the Rules framed thereunder, were committed by the erstwhile directors which include the petitioners. 4.6 The said action of investing in C.R.B. Ltd., has put the respondent No.3 ý Bank to bear loss of about Rs. 3 Crores and also loss of interest on the said amount. 4.7 In light of the said facts and circumstances, a notice dated 11.10.1999 was issued calling upon the petitioners to s