# VWULBHAIMANSINGBHAICHAUDHARY v. STATE OF GUJARAT & ANOTHER

- **Citation:** [2017] 6 S.C.R. 733
- **Court:** Supreme Court of India
- **Decided:** 2017-04-17
- **Case number:** Civil Appeal No.14678of2015
- **Bench:** J. Chelameswar, Abhay Manohar Sapre
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vwulbhaimansingbhaichaudhary-v-state-of-gujarat-another-32030
- **Pages:** 31

## Headnote

Gujarat Co-operative Societies Act, 1961:
A
B
s. 76B - Appellant elected as Chairman of District Cooperative Milk Producers Union Ltd. for three years - However. he
C
continued to hold office beyond period of three years - Show cause
notice by Registrar of Co-operative Societies u/s. 76B(l) & (2) -
Order dated 10.3.2015 by Registrar removing appellant from office
and further disqualifying him for a period of three years - Writ
petition by appellant - Single Judge upheld the action of Registrar D
insofar as it pertained to the removal of appellant but set aside the
order insofar as it pertained to his disqualification for three years
- LPA by appellant, dismissed - Plea of appellant in Supreme Court
that his removal be set aside after examining the correctness of the
conclusion recorded by Registrar w.r.t. the Charge Nos. 2, 3, 6, 9,
JO and 11 framed against him - On appeal, held: The conclusions
E
recorded by Registrar in his order removing appellant from office,
remained undisturbed-by High Court - In substance, the plea of
appellant was that Supreme Court should act as an appellate Court
F
to determine the correctness of conclusion drawn on the basis of
evidence before Registrar. which cannot be accepted - This is an
exercise which ought not to be normally undertaken even by High
Courts in the jurisdiction u/Art. 226 nor by Supreme Court on further
appeal by leave under Art.136 of the Constitution - High Court
rightly declined to interfere witli the findings -
Appellant's
disqualification for a period of three years held to be reasonable - -
No error found in the decision of High Court in this regard -
G
Constitution of India - Arts. 136, 226.
ss. 76B and 81 - Exercise of power under both the sections,
by Registrar. if mandatory - Appellant disqualified u/s. 76B(2) -
Plea of appellant that his disqualification u/s. 76B(2) is
733
H
734
SUPREME COURT REPORTS
[2017] 6 S.C.R.
A
unsustainable, because each one of the acts or omissions which
formed the basis for action against appellant was either taken by
or ratified by the entire governing body ("Committee'') of the society,
therefore, action if at all required, ought to be taken against the
Committee of the society uls.81 and not against individual members
B
c
thereof u/s. 76B - Held: Committees are inanimate bodies and are
nothing but a collective name for the conglomeration of individual
officers of the society - Further, it is essentially for the Registrar tu
make an assessment whether on the facts and circumstances of each
case either action is tu be taken against the Committee or an
individual officer or both - The decision of Registrar taken in
exercise of such discretionary power would not be amenable to
challenge on the ground that he failed tu take action under both
the sections, i.e., 76B and 81 - The Act envisages joint and several
action against officers in their capacity as members of the Committee.
s. 76B(2) - Two show cause notices issued tu appellant. one
D uls.76B(J) for his removal and the other u/s.76B(2) for his
disqualification - Appellant disqualified fur six years u/s. 76B(2) -
Permissibility of - Held: Section 76B(2) as of today provides fur
disqualification of an officer for a period not exceeding six years -
Originally the Section provided for disqualification only for four
years - But the "four years" period was substituted by "six years"
E period by 2015 amendment - However, in the instant case. all the
acts and omissions which formed basis for action against appellant
pertained to the period anterior to 2015 amendment - Further. there
is nothing in the said amendment act which warrants an
interpretation that the legislature intended tu create a disqualification
F
which would run/or a maximum period of six years with retrospective
effect - Thus, appellants disqualification for six years held not
tenable - Gujarat Co-operative Societies (Amendment) Act, 2015
(Act No.12 of 2015).
76B(l) & (2) - Two show cause notices issued to appellant.
G one uls. 76

## Text

_Characters 0–39,575 of 74,148. This is a partial read: ask again with offset=39575 for what follows._

[2017] 6 S.C.R. 733
VWULBHAIMANSINGBHAICHAUDHARY
v.
STATE OF GUJARAT & ANOTHER
(Civil Appeal No.14678of2015)
APRIL 17, 2017
[J. CHELAMESWAR AND ABHAY MANOHAR SAPRE, JJ.)
Gujarat Co-operative Societies Act, 1961:
A
B
s. 76B - Appellant elected as Chairman of District Cooperative Milk Producers Union Ltd. for three years - However. he
C
continued to hold office beyond period of three years - Show cause
notice by Registrar of Co-operative Societies u/s. 76B(l) & (2) -
Order dated 10.3.2015 by Registrar removing appellant from office
and further disqualifying him for a period of three years - Writ
petition by appellant - Single Judge upheld the action of Registrar D
insofar as it pertained to the removal of appellant but set aside the
order insofar as it pertained to his disqualification for three years
- LPA by appellant, dismissed - Plea of appellant in Supreme Court
that his removal be set aside after examining the correctness of the
conclusion recorded by Registrar w.r.t. the Charge Nos. 2, 3, 6, 9,
JO and 11 framed against him - On appeal, held: The conclusions
E
recorded by Registrar in his order removing appellant from office,
remained undisturbed-by High Court - In substance, the plea of
appellant was that Supreme Court should act as an appellate Court
F
to determine the correctness of conclusion drawn on the basis of
evidence before Registrar. which cannot be accepted - This is an
exercise which ought not to be normally undertaken even by High
Courts in the jurisdiction u/Art. 226 nor by Supreme Court on further
appeal by leave under Art.136 of the Constitution - High Court
rightly declined to interfere witli the findings -
Appellant's
disqualification for a period of three years held to be reasonable - -
No error found in the decision of High Court in this regard -
G
Constitution of India - Arts. 136, 226.
ss. 76B and 81 - Exercise of power under both the sections,
by Registrar. if mandatory - Appellant disqualified u/s. 76B(2) -
Plea of appellant that his disqualification u/s. 76B(2) is
733
H
734
SUPREME COURT REPORTS
[2017] 6 S.C.R.
A
unsustainable, because each one of the acts or omissions which
formed the basis for action against appellant was either taken by
or ratified by the entire governing body ("Committee'') of the society,
therefore, action if at all required, ought to be taken against the
Committee of the society uls.81 and not against individual members
B
c
thereof u/s. 76B - Held: Committees are inanimate bodies and are
nothing but a collective name for the conglomeration of individual
officers of the society - Further, it is essentially for the Registrar tu
make an assessment whether on the facts and circumstances of each
case either action is tu be taken against the Committee or an
individual officer or both - The decision of Registrar taken in
exercise of such discretionary power would not be amenable to
challenge on the ground that he failed tu take action under both
the sections, i.e., 76B and 81 - The Act envisages joint and several
action against officers in their capacity as members of the Committee.
s. 76B(2) - Two show cause notices issued tu appellant. one
D uls.76B(J) for his removal and the other u/s.76B(2) for his
disqualification - Appellant disqualified fur six years u/s. 76B(2) -
Permissibility of - Held: Section 76B(2) as of today provides fur
disqualification of an officer for a period not exceeding six years -
Originally the Section provided for disqualification only for four
years - But the "four years" period was substituted by "six years"
E period by 2015 amendment - However, in the instant case. all the
acts and omissions which formed basis for action against appellant
pertained to the period anterior to 2015 amendment - Further. there
is nothing in the said amendment act which warrants an
interpretation that the legislature intended tu create a disqualification
F
which would run/or a maximum period of six years with retrospective
effect - Thus, appellants disqualification for six years held not
tenable - Gujarat Co-operative Societies (Amendment) Act, 2015
(Act No.12 of 2015).
76B(l) & (2) - Two show cause notices issued to appellant.
G one uls. 76B(l) for his removal and the other u/s. 76B(2) for his
disqualification, both on same set of facts - Permissibility of- Held:
H
The basic requirement of sub-section (2) is that the power thereunder
could be exercised only against an officer of a society who has
already been removed from office u/sub-section (1) - Therefore, the
factual basis on which action u/sub-section (1) and sub-section (2)
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
735
GUJARAT & ANOTHER
of s. 76B is to be taken is bound to be the same, though the reafons
A
and logic on the basis of which action under either of the subsections is to be taken could be different.
s. 76B(2) - Valid notice under - Requirement of - Explained.
Words and phrases - 'Committee' - Meaning of - Explained,
in context of Gujarat Co-operative Societies Act, 1961.
B
Repeal - Of an enactment - Effect of - Discussed.
Disposing of the appeals, the Court
HELD: 1.1 Section 768, Gujarat Co-operative Societies
Act, 1961 ('THE ACT') provides for (i) removal of "any officer"; c
and (ii) disqualification of such a removed officer to hold or contest
election to any office either of that Society or any other Society
for a certain period. It was in exercise of the power under Section
768 that action was initiated against appellant initially by issuing
Show-Cause Notice-I culminating in the final order of Registrar
by which appellant was removed from the office of the Chairman D
of the Union and also disqualified for a period of three years from
holding any office or to participate in any election. [Pa:ras 23, 26]
[747-D; 749-D]
1.2 The conclusions recorded by the Registrar, in his final
order removing appellant from office, remained undisturbed by
the High Court. The High Court recorded that of the various
charges leveled against appellant, Charges Nos. 2, 3, 6, 9, 10
and 11 had been held proved by the Registrar. The High Court
further held that such findings could not be determined in
exercise of the jurisdiction under Article 226 of the Constitution
of India. The said view of the Single Judge was endorsed by the
Division Bench in Letters Patent Appeal. [Para 27) [749-E; 750-A]
1.3 It is a submission of the appellant that the correctness
of the conclusion recorded by the Registrar that the charges 2,
E
F
3, 6, 9, 10 and 11 are framed against appellant is required to be
G
examined. In substance, the argument is that this Court should
act as the appellate Court to determine the correctness of tlie
conclusion drawn on the basis of the evidence before the
Registrar. It is an exercise which ought not to be normally
undertaken even by the High Courts in the jurisdiction under
Article 226 nor by this Court on further appeal by leave under H
736
SUPREME COURT REPORTS
[2017) 6 S.C.R.
. A Article 136 of the Constitution. The High Court rightly declined
to interfere with those findings. No error is found in the decision
of the High Court in this regard. The exercise of examining the ·
correctness of the conclusions recorded by the Registrar is
declined to be undertaken. [Paras 28, 29) [750-F-G; 751-A-B)
B
2. Section 81 authorises the supersession of the Committee
of a Society. Committee of a cooperative society by definition is a
body to which "the direction and control of the management of
the affairs of a Society is entrusted to". Committee is nothing but
a collective name for the conglomeration of the individual officers
of the society. Committees are inanimate bodies. They function
C through human agency i.e. the individual members of the
Committee. Section 76B authorises action against individual
officers of a Society. In either case, action is required to be taken
upon the formation of the opinion by the Registrar that (i) there
is a persistent default; or (ii) negligence in the performance of
. D duties; or (iii) commission of an act which is prejudicial to the
interest of the Society or its members. The Registrar is conferred
with a discretionary power to take action against officers/members
of the Committee individual or against the Committee
collectively. The decision of the Registrar taken in exercise of
such discretionary power would not be amenable to challenge on
E
the ground· that the Registrar failed to take action under both
Section·s 76B and 81 unless the individual member against whom
actio.n is proposed pleads and proves ma/a fide. In substance,
THE ACT envisages joint and several action against the officers
in their capacity as members of the committee. While Section 81
F
is designed to deal with the dereliction of the duties by the
committee as a body, Section 76B deals with the dereliction of
duties of the individual members of the committee. The Registrar
is invested by THE ACT with the discretion to choose the proper
course of action depending upon the situation. [Paras 39-44)
[755-E-F; 756-C-D; 757-H; 758-A, B, C-D)
·G
3. Section 76B(l) contemplates removal of an officer of a
society if the Registrar is satisfied that such an officer is guilty of
any one of the misconducts specified under the section. Subsection (2) further authorises the Registrar to disqualify such an
officer either to contest or to hold any office in that society from
H · which the officer is removed and also in any other society for a
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
737
GUJARAT & ANOTHER
.
period to be specified by the Registrar subject to a statutory A
outer limit. From the language of sub-section (2), it appears that
the Registrar is not obliged to disqualify every officer against
whom an order of removal under Section 76B(l) is passed. Going
by the text of sub-section (2) which says that the "Registrar may
... direct that the officer so removed shall be disqualified ..... ", B
the power to disqualify is discretionary. The basic requirement
of sub-section (2) is that the power thereunder could be exercised
only against an officer of a society who has already been removed
from office. Therefore, the factual basis on which the action under
sub-section (1) and sub-section (2) of Section 76B is to be taken
is bound to be the same though the reasons and logic on the C
basis of which action under either of the sub-sections is to be
taken could be different. Depending upon the intensity and gravity
of the misconduct in a given case, mere action (under Section
76B(l)) of removal from office might suffice and meet the ends of
justice. Whereas in some cases action under both the sub-sections D
might be called for. But in no case action only under Section
76B(2) is permissible without taking action under Section 76B(l).
(Para 46] (758-G-H; 759-A-D]
4. Further, the requirements of valid notice under Section
76B(2) are that the notice should indicate broadly the reasons
which prompt the Registrar to initiate action and the period for
E
which the person, against whom the action is initiated, is proposed
to be disqualified. Section 76B(2) as of today provides for
disqualification of an officer for a period not exceeding six years.
Originally the Section provided for disqualification only for four
years. But the "four years" period was substituted by "six years". · F .
period by the Gujarat Co-operative Societies (Amendment) Act,
2015 (Act No.12 of 2015). However, all the acts and omissions
which formed the basis for action against appellant pertained to
the period anterior to the Act No.12 of 2015. Substitution of parts
of an enactment is nothing but pro tanto to repeal those parts.
Normally when an enactment is repealed, any action initiated under G
that enactment during its currency should lapse. To meet such a
contingency, the Gujarat General Clauses Act made a provision
under Section 7. It seeks to preserve various rights and
obligations acquired or incurred under repealed enactments. As
H
738
SUPREME COURT REPORTS
[2017] 6 S.C.R.
A a logical corollary to this proposition, no right or liability can be
created by a repealing enactment, which is inconsistent with the
rights and obligations conferred under the repealed Act unless
the repealing enactment makes an express declaration to that
effect or adopts some other technique known to law to achieve
B that purpose. Giving retrospective effect to the repealing
enactment is one of the techniques by which the legislature seeks
to achieve that purpose. However, there is nothing in Act No.12
of 2015 which warrants an interpretation that the legislature
intended to create a disqualification which would run for a
maximum period· of six years with retrospective effect. (Paras
C 48, 51, 52-54) (760-D; 761-F; 762-A-D; 763-A-C)
D
E
Superintendent (Tech.I) Central Excise l.D.D. Jabalpur
& Ors. v. Pratap Rai (1978) 3 SCC 113 - relied on.
Thimmasamudram Tobacco Co. v. Assistant Collector
of Central Excise, Nellore Division, Nellore AIR 1961
AP 324 - approved.
AIR 1961 AP 324
(1978) 3 sec 113
Case Law Reference
approved
relied on
Para 36
Para 36
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14678
of2015.
From the Judgment and Order dated 19.10.2015 of the High Court
of Gujarat at Ahmedabad in Letter Patent Appeal (LPA) No. 1302 of
F
2015 in Special Civil Application No. 9618 of2015
G
WITH
W. P. (C) No. 824 of2015
C. A. No. 13784 of2015
C. A. No. 1881 of2016.
Tushar Mehta, ASG, Fali S. Nariman, Harin P. Raval, Sr. Advs.,
Prakash Jani, AAG., Subhash Sharma, Anirudh Sharma, Naresh
Chaudhary, Abhaid Parikh, Anip Sachthey, Ms. Anjali Chauhan,
Ms. Kiran Dhawan, Chetanya Singh, Ms. Ria Sachthey, Ms. Hemantika
H
Wahi, Ms. Jesal Wahi, Advs. for the appearing parties.
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
GUJARAT & ANOTHER
The Judgment of the Court was delivered by
CHELAMESWAR, J.
C.AN0.14678/2015, C.A. No.1881/2016 & C.A.No.13784/2015
1. There are three appeals before us - two 1 of them filed by one
Vipulbhai Mansingbhai Chaudhary, ('Chaudhary' hereafter) and the third
filed by the State of Gujarat & Others2•
2. The matter arises under the Gujarat Co-operative Societies
Act, 1961 (for short 'THE ACT'). The Mehsana District Co-operative
Milk Producers Union Ltd. (hereafter 'UNION') is a Society within the
meaning of the expression under Section 2( 19)3 of THE ACT. Chaudhary
was elected as its Chairman for a period of three years commencing
froJll 2.5.2011 to 1.5.2014. However, he continued to hold the office
beyond the period of three years by virtue of the operation of Section
74C(2) - as it then existed:
"Section 74C(2). When the election of all the members of
the committee of any such societies held at the same time,
the members elected on the committee at such general
election shall hold office for a period of three years from
the date on which the first meeting is held and shall continue
in office until immediately before the first meeting of the
members of the new committee."
3. During the continuance of Chaudhary in the office, a showcause notice was issued on 12.1.2015 (hereafter "Show-Cause Notice-
!") by the Registrar" of the Co-operative Societies (hereafter "the
Registrar") purporting to be one issued under Section 76B(l) & (2) of
THE ACT calling upon Chaudhary to show cause why he should not be
removed from the office for various reasons mentioned therein.~
Chaudhary challenged the said show-cause notice by way of a writ
'Civil Appeal Nos.14678 of2015 and 1881 of2016
'Civil Appeal No.13784/2015.
' Section 2{ 19). "Society" means a co-operative society registered, or deemed to be
registered, under this Act;"
4 Section2{17)-"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;
·
'Though the notice purported to have been issued invoking both sub-sections {I) and
(2) of Section 76B, there is no whisper in the said notice regarding the proposal to
disqualify Chaudhary for a further period.
739
A
B
c
D
E
F
G
H
740
SUPREME COURT REPORTS
[2017] 6 S.C.R.
A
petition. It was dismissed by the Gujarat High Court as pre-mature.
The dismissal was confirmed by a Division Bench in a Letters Patent
Appeal. Aggrieved, Chaudhary carried the matter to this Court by way
ofSLP (Civil) No.4668/2015 which was filed on 12.2.2015.
4. During the pendency of SLP (Civil) No. 4668 of 2015, the
B
Registrar passed a final order on 10.3.20156 by which Chaudhary was
removed from the office and also disqualified for a period of three years
from holding "any office in any Sahakari Manda! to participate in any
election for a period of three years".
5. This Court by an order dated 20.3.2015 disposed of SLP(C)
c No. 4668/2015 directing that status quo regarding the order of the Registrar
dated 10.3.2015 be maintained till 30.3.2015 to enable Chaudhary to
approach the appropriate forum challenging the correctness of the
Registrar's order dated 10.3.2015.
6. Chaudhary filed a statutory revision before the State
D
Government. The Government by its order dated 8.5.2015 confirmed
the Registrar's order dated 10.3.2015.
7. Aggrieved by the same, Chaudhary filed a Writ Petition No. 9618/
2015. A learned judge of the High Court by his judgment dated29.9.2015
upheld the action of the Registrar insofar as it pertained to the removal
E
ofChaudhary from the office but set aside the order insofar as it pertained
to the disqualification ofChaudhary for a future period of three years. It
was held that proceedings under Section 76B(2) for disqualifying
Chaudhary could have been initiated only after an order under Section
76B(l) is passed. Since the Registrar acted on the basis ofa composite
notice (Show-Cause Notice-I), the action of the Registrar under Section
F
76B(2) could not be sustained.
8. Aggrieved by that part of the judgment in Writ Petition No.9618/
20 l S insofar as it went against him, Chaudhary preferred Letters Patent
• ..... Thiis, talcing into consideration the facts as a whole, because of the irregularities
G
committed by him, the Union has suffered great financial damage and serious damage
has been caused to the Mehsana Jilla Dudh Utpadak Sangh as well as the lacs of
members providing milk in the milk societies connected with it and interests of the
Pashu Palaks. In such circumstances, l consider it proper to remove him from the post
and also for the aforesaid reasons, think it proper to held him disqualified to have any
office in any Sahakari Manda! or to participate in any election for a period of three
years.
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
741
GUJARAT & ANOTHER [CHELAMESWAR, J.]
Appeal (LPA) No.1302 of 2015. The said LPA was dismissed on
A
19 .10.2015. Chaudhary approached this Court by way of Special Leave
Petition (C) No.33630/2015 [now C.A.No.14678 of 2015].
9. In view of the fact that the High Court had set aside the order
of the Registrar disqualifying Chaudhary for a period of three years, the
Registrar issued a fresh show-cause notice dated 3.10.2015 (hereafter
B
'Show-Cause Notice-II') calling upon Chaudhary to explain as to why
he should not be disqualified for a future period in exercise of the powers
under Section 76B(2) of THE ACT.
10. The said show-cause notice was challenged by Chaudhary
again by way of another Writ Petition (SCA No. 17826 of 2015) c
unsuccessfully. 7 Chaudhary carried the matter in Letters Patent Appeal
(LPA No.1343/2015)8•
11. Eventually, the LPA No.1343/2015 of Chaudhary was allowed
by the High Court on 2.11.2015. The Show-Cause Notice-II was quashed
holding:
D
"16. If the impugned order of the learned single Judge is examined
in light of the observations made by us hereinabove, it can be said
that the learned single Judge has committed error in interpreting
the provisions of section 76B(l) and 76B(2) of the Act and the
consequential order for dismissal of the petitioner calls for
E
interference.
17. As observed by us, if the second separate show cause notice
is not contemplated as per section 76B(2) of the Act, and both the
consequences should arise in only one proceeding under
proceedings of 76B of the Act, then the fact remains that the
F
order for disqualification was quashed by this court without there
being any express liberty reserved for continuation with the
proceedings for disqualification under section 7 6B(2) of the Act.
Therefore, in light of the aforesaid observations and discussions,
it can be said .that the impugned action of issuance of separate
'The writ petition was dismissed by a judgment dated 27.10.2015.
'It must be stated for the sake of the completion of the narration of the fact that during
the pendency of the said LPA, the State made an oral application before the Division
Bench to adjourn the matter to enable the Registrar to seek certain clarifications from
the Single Judge. Permission was granted. However, the Single Judge declined to give
G
any clarification.
H
742
SUPREME COURT REPORTS
[2017] 6 S.C.R.
A
show cause notice for disqualification under section 76B(2) of
the Act is without jurisdiction and beyond the scope of section
76B of the Act.
B
c
and therefore concluded:
20. In view of the above, the impugned notice dated 3.10.2015
(Annexure-F) is quashed being beyond the scope and ambit of
section 76B of the Act. The order of the learned single Judge is
set aside. The appeal is allowed accordingly. Considering the facts
and circumstances, no order as to costs."
12. It can be seen from the above that the High Court held that
the Show-Cause Notice-II is untenable for the reason that when the
High Court had set aside the Show-Cause Notice-I, it did not record
that the Registrar is permitted to issue a fresh show-cause notice proposing
action under Section 76B(2).
13. Before recording such a conclusion, the High Court rejected
D
two submission made on behalf of the Registrar:
(i) that in view of the fact that the earlier order of the Registrar
disqualifying Chaudhary was quashed on the ground ofbreach
of principles of natural justice, it would still be open to the
Registrar to issue show cause notice under Section 76B(2) of
E
THE ACT.9
(ii) Chaudhary is estopped from arguing that the notice under
Section 76B(2) is illegal because in Writ Petition No.9618 of
2015, Chaudhary contended that a composite notice under
Section 76B(l) and (2) proposing to remove Chaudhary from
F
office and disqualifying him for a further period from contesting
any election to the Society was illegal.
'In support of that submission, the Registrar relied upon a large number of decisions.
Para 18 of the Judgment dated 02.11.2015 of the High Court of Gujarat in LPA No.1343
of 2015: "Mr. Jani, relied upon the decisions of the Apex Court in M/s. Guduthur
G
Bros. Vs. The Income-tax Officer, Special Circle, Bangalore, reported at AIR
1960 SC 1326, in Superintendent (Tech. I) Central Excise, I.D.D. Jabalpur and
Others vs. Pratap Rai reported at [(1978) 3 SCC 113). in Anand Narain Shukla vs.
State of Madhya Pradesh reported at (1980) 1 SCC 252, in M.V. Janardhan Reddy
vs. Vijaya Bank and Others reported at ((2008) 7 SCC 738] and in Commissioner
of Sales Tax and others vs. M/s. Subhash and Company reported at AIR 2003 SC
1628 •.• "
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
743
GUJARAT & ANOTHER [CHELAMESWAR, J.]
14. The reasons of the High Court for rejecting the above two
A
submissions of the Registrar are recorded at para 18.1 and 19 respectively
as follows:
"18.l As such, the facts of all the aforesaid cases cannot be
equated with the facts and circumstances of the present case as
narrated hereinabove. Further, in view of the interpretation as
B
made by us hereinabove, if only one proceeding is contemplated
under section 76B of the Act for two consequences of removal
and disqualification, and those proceedings have ended in SCA
No. 9618 of 2015 and LPA No. 1302 of 2015, it would not be
open to the authority to initiate second proceedings on the same
C
facts, more particularly when no express liberty was so reserved
and even otherwise also it could not be reserved in view of the
interpretation made by us hereinabove. Hence, when initiation of
the second. proceedings by issuance of the show cause notice is
beyond the scope of section 76B of the Act, the said decisions
would be of no help to Mr. Jani, learned AAG."
D
19. Mr. Jani, learned AAG did attempted to contend that the
appellant in the earlier round of litigation of SCA 9618 of 2015
had contended that separate show cause notice under Section
76B(2) of the Act was required to be issued and not the composite
notice under section 76B(l) & (2) and he further contended that
E
learned single judge having accepted the said aspect, it would not
be open to the petitioner to play hot and cold at the same time, and
now to contend that a composite notice was required, more
particularly when the learned single Judge has accepted the said
contention and the said order has been not interfered with in the
LPA."
15. In the meanwhile on 23. l 0.2015, a notification fixing the dates
for the election to the Managing Committee of the UNION for the tenure
commencing from 2015 to 2020 was issued. Chaudhary filed his
nomination. He was declared elected uncontested on 18.11.2015.
16. Aggrieved by the judgment in LPA No.1343 of 2015 dated
2.11.2015 by which the second show-cause notice was quashed by the
High Court, State of Gujarat and others filed SLP(C) No. 32004of2015
(Civil Appeal No.13784 of2015).
F
G
H
744
A
B
c
D
E
SUPREME COURT REPORTS
[2017] 6 S.C.R.
17. By an order dated 23.11.2015 of this Court, Chaudhary was
permitted to reply to the second show-cause notice 10 and he did infact
file a reply. Thereupon the Registrar passed an order dated 16.12.2015
disqualifying Chaudhary for a period of six ( 6) years.
"Therefore, I, Nalin Upadhyay (IAS), Registrar of Cooperative
Societies, Gujarat State, Gandhinagar, in exercise of powers
conferred upon me under section 76(B)(2) of the Gujarat
Cooperative Societies Act, 1961, declare Mr. Vipulbhai
Mansingbhai Chaudhary, the then Chairman, the Mehsana District
Cooperative Milk Producers Union Ltd., Mehsana, as disqualified
to participate in any election or to hold any post in the Mehsana
District Cooperative Milk Producers Union Ltd., Mehsana and
also any other cooperative organization in the State, for a period
of 6 (six) years from the date of this order."
18. Aggrieved by the same, Chaudhary filed Writ Petition (SCA
No.177 of2016). By the judgment dated 18.01.2016, the same was
partly allowed by a learned Single Judge:
"26. For the reasons stated above, the impugned order dated
16.12.2015 is quashed only to the extent it imposes period of
disqualification beyond 3 years. Disqualification of the petitioner
under section 76B(2) of the Act for a period of 3 years is not
disturbed. The petitioner, thus will have to suffer disqualification
under section 76B(2) of the Act for a period of 3 years from the
10
This Court while granting leave in SLP (C) No.33630 of2015 [arising out of the
LPA No.1302 of2015 arising out of WP No. 9618 of2015) filed by Chaudhary
orderedF
"It has been submitted by the learned senior counsel appearing for the
respondent (Chaudhary) that the reply to the second show cause notice is
being filed today. In these circumstances, we direct that if any order adverse
to the respondent is passed by the Registrar, Cooperative Societies, State of
Gujarat, the same shall not be implemented for a period of four weeks
from the date of communication of the order to the respondent." ·
G
By another order dated 26.02.2016, this Court while granting leave in SLP (C)
H
No.3980 of2016 filed by Chaudhary ordered:
"Leave granted.
List this appeal in the month of August, 2016 for hearing.
No interim relief.
Tag with SLP (C) No.33630 of2015 and connected matters."
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
745
GUJARAT & ANOTHER [CHELAMESWAR, J.]
date of the impugned order. To the extent disqualification is
A
imposed beyond 3 years, the petition succeeds. The petition thus
finally stands disposed of accordingly."
19. Challenging the said judgment insofar as it went against him,
Chaudhary carried the matter in LPA No.55 of 2016. A division bench
of the High Court by its judgment dated 28.01.2016 declined to interfere
B
with the Single Judge's order.
"17. In view of the aforesaid observations and discussion, we find
that no further case is made out for interference to the view taken
by the learned Single Judge in the impugned order. Hence, the
appeal is disposed off accordingly with no order as to costs."
c
Hence, SLP (C) No.3980/2016, now Civil Appeal No.1881 of 2016.
20. Following submissions are made on behalfofChaudhary:
(i) The order of the Registrar dated 10.03.2015 had been setaside in part [insofar as it pertained to action under Section
76B(2)] by the High Court in Writ PetitionNo.9618 of2015.
D
The same was allowed by the Registrar to become final
without any further challenge. Therefore, Show-Cause
Notice-II could not have been issued in the absence of the
grant of any leave by the High Court to issue a fresh showcause notice under Section 76B(2).
E
(ii) If Show-Cause Notice-II is illegal, all further action flowing
from show-cause notice-II are void ab initio.
(iii) Assuming for the sake of argument that the Registrar is entitled
to issue show-cause notice-II and take consequential action,
the process of disqualifying Chaudhary invoking power under
F
Section 76B(2) is unsustainable, because each one of the acts
or omissions which formed the basis for action against
Chaudhary was either taken by or ratified by the governing
body ("committee") of the society. Therefore, action if at all
required ought to be taken against the entire governing body
of the society under Section 81 but not against individual
G
members thereof under Section 76B.
(iv) Alternatively, it is submitted that even if resort to the power
under Section 76B is permissible, show-cause notice-II
narrates the same set of facts and gives the same reasons
H
746
A
B
c
SUPREME COURT REPORTS
[2017] 6 S.C.R.
for action both under sub-sections ( l) and (2) to Section 76B.
Such a course of action is not permissible under law as the
considerations relevant under Section 76B( l) for removing
an office bearer of the society from the office and
considerations which call for disqualifying an office bearer
under Section 76B(2) either from holding any office or
contesting an election to the office must necessarily be
different.
(v) Even if action under Section 76B(2) is tenable, the decision
of the Registrar to disqualify Chaudhary for six years is wholly
unsustainable because it is not mandatory under sub-section
(2) to disqualify a person for complete six years in every
case.
(vi) The order under Section 76B(2) must disclose the reasons
which prompted the Registrar to impose a disqualification for
the maximum permissible period of six years. The order is
D
absolutely silent in this regard thereby rendering the order
wholly arbitrary.
E
F
G
H
21. The State of Gujarat and the Registrar submitted:
(i) The Division Bench of the High Court grossly erred in recording
the conclusion that show-cause notice-II is illegal on the ground
that it was issued without obtaining the leave of the High
Court when it had partially set-aside (in Writ Petition No.9618
of2015) the order dated 10.03.2015.
(ii) Except for the ipsi dixit of the High Court that the Registrar
is required to obtain leave of the Court before issuing showcause notice-II, neither any principle oflaw nor any provision
oflaw which forms the legal basis for such a proposition is
referred to in the impugned judgment.
(iii) In the alternative, it is argued that Chaudhary is estopped
from advancing such an argument in view of the fact he had
challenged the order of the Registrar dated l 0.03.2015 insofar
as it pertained to Section 76B(2) on the ground that such a
notice could not have been issued in exercise of the power
under Section 768(2) without first recording a conclusion
under Section 768(1) that he was required to be removed
from the office.
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
747
GUJARAT & ANOTHER [CHELAMESWAR, J.)
(iv) The findings recorded by the Registrar after an elaborate
A
inquiry, that various charges against Chaudhary are proved,
are findings of fact. Those findings disclose that the various
actions/omissions held proved against Chaudhary are
prejudicial to the interest of the society. Therefore, they rightly
formed the basis for both the actions i.e. removal of B
Chaudhary from the office as well as the decision to disqualify
Chaudhary under Section 76B(2).
(v) Assuming for the sake of argument that the various actions/
omissions which formed the basis for action against
Chaudhary are either with prior approval or subsequent
ratification of the Committee of the UNION -justifying action
C
under Section 81 of THE ACT, law does not prohibit action
against individual members of the Committee. On the other
hand, Section 76B clearly provides for such a possibility.
22. A brief survey of the two provisions of THE ACT is necessary
to examine the various questions involved in these appeals.
D
23. Section 76B provides for (i) removal of"any officer"; and (ii)
disqualification of such a removed officer to hold or contest election to
any office either of that Society or any other Society for a certain period.
"76B. Removal of officer-(i) If, in the opinion of the Registrar,
any officer makes persistent default or is negligent in performance
of the duties imposed on him by this Act or the rules or the byeE
laws or does anything which is prejudicial to the interests of the
society or where he stands disqualified by or under this Act, the
Registrar may, after giving the officer an opportunity of being
heard, by order remove such officer and direct the society to
elect or appoint a person or a qualified member in the vacancy
F
caused by such removal and the officer so elected or appointed
shall hold office so long only as the officer in whose place he is
elected or appointed would have held if the vacancy had not
occurred.
(2) The Registrar may, by order, direct that the officer so removed
G
shall be disqualified to hold or to contest election for any office in
the society from which he is removed and in any other society
for a period not exceeding six years from the date of the order
and such officer shall stand disqualified accordingly."
24. Section 81 authorises (i) the supersession of the Committee
of a Society; and (ii) appointment of a substitute committee or an
H
748
SUPREME COURT REPORTS
(2017] 6 S.C.R.
A administrator to manage the affairs of the society and various things
incidental thereto. Section 81 insofar as it is relevant for our purpose
reads as follows:-
"Section 81(1) If in respect of a committee of a society having
the Registrar as its member, the State Government and in respect
B
of a committee of a Society which does not have the Registrar as
its member, the Registrar, is of the opinion that;
c
D
E
(i) the committee persistently makes default; or
(ii) the committee is negligent in the performance of its duties
imposed on it by or under this Act or the rules made thereunder
or the bye-laws; or
(iii) the committee has committed any act prejudicial to the interest
of the society or its members;
the State Government or, as the case may be, the Registrar, after
giving the committee an opportunity of being heard, within fifteen
days from the date of issue of notice, by an order in writing,
supersede the Committee and appoint-
( a) a Committee, consisting of one or more members of the society,
not being the members of the committee superseded under
this sub-section, or
(b) an Administrator from amongst the officers of the Cooperation
Department of the State Government -
to manage the affairs of the society for a period not exceeding
one year as may be specified in the order, which period may, at
F
the discretion of the State Government or the Registrar, as the
case may be, be extended from time to time, so, however, the
term of the Committee or the Administrator shall be, the remaining
term of the committee in whose place he is appointed or two
years in aggregate, whichever is less."
G
25. The expressions "committee", "officer'' and "society" are
H
defined expressions under Section 2(5), 2(14) and 2(19) of THE ACT:
"Section 2(5) "committee" means the Managing Committee or
the governing body of a society to which the direction and control
of the management of the affairs of a society is entrusted to;
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF
749
GUJARAT & ANOTHER [CHELAMESWAR, J.]
Section 2( 14) "officer" means a person elected or appointed by a
A
society to any office of such society according to its bye-laws;
and includes a chairman, vice-chairman, president, vice-president,
managing director, manager, secretary, treasurer, member of the
committee, and any other person elected or appointed under this
Act, the rules or the bye-laws, to give directions in regard to the
B
business of such society;
Section 2(19) "society" means a co-operative society registered,
or deemed to be registered, under this Act;"
Further analysis of Sections 76B and 81 would be undertaken in
the judgment at the appropriate place.
c
26. It was in exercise of the power under Section 76B. Action
was initiated against Chaudhary initially by issuing Show-Cause Notice-
! which culminated in a final order dated 10.3.2015 by which Chaudhary
was removed from the office of the Chairman of the UNION and also
disqualified for a. period of three years from holding any office or to
D
participate in any election "in any sahakari mandal". 11
27. The conclusions recorded by the Registrar, in the order of
dated 10.3.2015 removing Chaudhary from office, remained undisturbed
by the High Court, in Special Civil Application No.9618/2015. The High
Court recorded (See paras 11 to 15 of the judgment) that of the various
E
charges leveled against Chaudhary, i.e. Charges Nos.2, 3, 6, 9, 10 and
11 had been held proved by the Registrar. The High Court further held
that such findings could not be determined in exercise of the jurisdiction
under Article 226 of the Constitution of India.
"16. The Court finds that in the nature of charges proved, the
view taken by respondent No.2 and affirmed by the Revisional
Authority is not to be disturbed in exercise of the powers under
Article 226 of the Constitution oflndia in absence of any complaint
as regards decision making process. It is not disputed that fair
F
and sufficient opportunities were given to the petitioner and
therefore, no complaint could be made as regards decision making
G
process to arrive at a decision by respondent No.2 to remove the
petitioner in exercise of powers under Section 76B(l) of the Act."
"SeeFIN5
In view of the subsequent development, it is not necessary for us to examine
the meaning of the expression "sahakari mandal".
H
750
A
B
c
D
E
SUPREME COURT REPORTS
(2017] 6 S.C.R.
The said view of the learned Single Judge was endorsed by the
Division Bench in Letters Patent Appeal No.1302/2015. The Division
Bench in its judgment dated 19.10.2015 held as follows:
"3. Mr. Thakore, learned senior counsel appearing for the appellant,
during the course of the hearing has taken us to the impugned
order passed by the authority for removal, which was subject
matter of the petition before the learned Single Judge. There are
findings recorded by the authority pertaining to persistent default
in performance of the duty by the appellant.