TaxTMI 
TaxTMI 
2017 (4) TMI 1391
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.... Section 2(19)^3 of THE ACT. Chaudhary was elected as its Chairman for a period of three years commencing from 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 show-cause notice was issued on 12.1.2015 (hereafter "Show-Cause Notice-I") by the Registrar^4 of the Co-operative Societies (hereafter "the Registrar") purporting to be one issued Under Section 76B(1) & (2) of THE ACT calling upon Chaudhary to show cause why he should not be removed from the office for various reasons mentioned therein.^5 Chaudhary challenged the said show-cause notice by way of a writ petition. It was dismissed by the Gujarat High Court as pre-mature. The dism....
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....The said show-cause notice was challenged by Chaudhary again by way of another Writ Petition (SCA No. 17826 of 2015) 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: "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(1) and 76B(2) of the Act and the consequential order for dismissal of the Petitioner calls for 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 order for disqualification was quashed by this Court without there being any express liberty reserved for continuation with the proceedings for disqualification Under Section 76B(2) of the Act. Therefore, in light of the aforesaid observations and di....
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....nabove. 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." 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(1) & (2) and he further contended that 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 23.10.2015, 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 whi....
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....order of the Registrar dated 10.03.2015 had been set-aside in part [insofar as it pertained to action Under Section 76B(2)] by the High Court in Writ Petition No. 9618 of 2015. 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 show-cause notice Under Section 76B(2). (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 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 members thereof Under Section 76B. (iv) Alternatively, it is submitted that even if resor....
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....rejudicial to the interest of the society. Therefore, they rightly formed the basis for both the actions i.e. removal of 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 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. 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 bye-laws or does anythin....
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.... 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. 25. The expressions "committee", "officer" and "society" are 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; Section 2(14) "officer" means a person elected or appointed by 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 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. 26. It was in exercise o....
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....he society under the Act, the Court would examine as to whether the opinion arrived at for removal is supported by objective material or not. Sufficiency of the material may not be re-assessed by the Court nor this Court would reappreciate the material and record a different finding as that of the appellate court. After having expressed the view for the scope of judicial review, when we have considered the contents of the impugned order passed by the learned Single Judge, it appears that no error has been committed by the learned Single Judge in affirming or not interfering with the order passed by the authority Under Section 76B(1) of the Act for removal of the Appellant as Chairman of the Milk Producers Union." 28. Civil Appeal No. 14678 of 2015 [Arising out of SLP(C) No. 33630 of 2015] challenging the correctness of the above-mentioned judgment of the High Court is one of the three appeals before us.^12 Therefore, it is a submission of Chaudhary that we are required to examine the correctness of the conclusion recorded by the Registrar that the charges 2, 3, 6, 9, 10 and 11 are framed against Chaudhary. In substance, the argument is that this Court should act as the appell....
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....e question (on the assumption that even if a combined notice is not objectionable) whether a combined notice issued to Chaudhary complied with the principles of natural justice and concluded that Chaudhary was "not asked to show-cause as to why he should not be disqualified".^16 32. The State of Gujarat and the Registrar accepted the said judgment and let it become final. 33. Hence, the submission of Chaudhary both before the High Court and this Court that Show-Cause Notice-II could not have been issued without obtaining the leave of the High Court. Such a submission found favour with the High Court in the judgment in LPA No. 1343 of 2015 when it was called upon to determine the legality of Show-Cause Notice-II. 34. The High Court did not assign any reason for such a conclusion nor any provision of law or precedent which warrants such a conclusion is referred to. We find it difficult to sustain the conclusion. 35. Any statutory power could "be exercised from time to time as occasion requires". Such a principle is recognised by Section 14^17 of the General Clauses Act, 1897 and Section 14^18 of the Gujarat General Clauses Act. Power conferred on Courts to adjudicate the ....
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......." The said conclusion is clearly untenable and is required to be set-aside and the first submission of Chaudhary is liable to be rejected. As a consequence, the second submission also falls to ground. 38. We shall now deal with the third submission of Chaudhary. The submission in substance is that the acts and omissions which formed the basis of allegations leading to action against Chaudhary Under Section 76B are not the individual acts of Chaudhary but the collective acts or omissions of the Committee of the UNION. Therefore, action if at all required must be taken Under Section 81 against the entire Committee but not only against Chaudhary. In absence of any action against the Committee, action against Chaudhary is illegal and unsustainable. 39. The text of both the Sections 76B and 81 is already taken note of. Section 81 authorises the supersession of the Committee of a Society. 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^22 that (i) there is a persistent default; or (ii) negligence in the performance of duties; or (iii) commission of an act ....
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....owed by the individual members of the Committee collectively. The legality of the directions given depends upon the nature of the various DUTIES to be performed by the Committee. Failure to give directions may also constitute an illegal omission (failure to perform a DUTY) in a given case. In a given case, if a decision taken by the committee is so patently prejudicial to the interest of the society calling for action Under Section 81, there is a collective failure of the individual members of the committee to perform their respective duty to give right directions in regard to the business of the society. Registrar is authorised to supersede the committee and appoint an administrator. If such course of action is proposed by the Registrar, it will not be open to an individual member of the committee to argue that he was not a party to such an objectionable conduct of the committee because either he abstained from the decision making process or disagreed with the objectionable course of action taken by the other (majority) members of the committee and therefore, there is no individual culpability on his part. Section 81 of THE ACT authorises collective action against all the membe....
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....n depending upon the situation. The argument of Chaudhary is not that the Registrar abused his discretion. The submission is that it is not permissible for the Registrar to resort to action only Under Section 76B. We reject the submission. 45. We shall now examine the fourth submission of Chaudhary that the reliance upon the same set of facts in both Show-Cause Notices-I and II would render the Show-Cause Notice-II and the action consequent thereupon illegal. At the outset, we must state that we have examined the tenor of both the show-cause notices and we proceed on the basis that the tenor of both of them is substantially the same if not identical. 46. Section 76B(1) 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. Sub-section (2) further authorises the Registrar to disqualify such an officer either to contest or to hold any office in that society from which the officer is removed and also in any other society for a period to be specified by the Registrar subject to a statutory outer limit. From the language of Sub-section (2), it appears to us that t....
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....n Under Section 76B(2) against Chaudhary, the Registrar rightly proceeded on the basis that there is an earlier order of the Registrar dated 10.3.2015 where charges against Chaudhary had been held proved and the High Court declined to interfere with those findings. He, therefore, opined that he is entitled to proceed to take action Under Section 76B(2) on the basis of the same conclusions which rendered Chaudhary liable for removal from office Under Section 76B(1). In the process, both in the show-cause notice-II and the order dated 16.12.2015, the Registrar once again repeated all the allegations which formed the basis for the order Under Section 76B(1). In our opinion, it was not really necessary. It would have sufficed if the Registrar mentioned the fact that Chaudhary was removed from the office of Chairman of the Society in exercise of the power Under Section 76B(1) - the mention of such a fact is also not mandatory. It is only a condition precedent for initiating action Under Section 76B(2). The requirements of valid notice Under Section 76B(2), in our opinion, are that the notice should indicate broadly the reasons which prompt the Registrar to initiate action and the per....
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....ies. Disqualifying Chaudhary only from the holding post in the UNION is to give him a chance to meddle with the affairs of the societies which are members of the UNION. 51. The only other question remaining to be examined is whether the period of disqualification of six years is consistent with law. 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" period by the Gujarat Co-operative Societies (Amendment) Act, 2015 (Act No. 12 of 2015). 52. All the acts and omissions which formed the basis for action against Chaudhary pertained to the period anterior^30 to the Act No. 12 of 2015. Under Section 7 of the Gujarat General Clauses Act, it is provided that where an enactment is repealed by a subsequent enactment, the repeal does not normally affect any investigation or legal proceedings in respect of any right, privilege, obligations, liability, penalty, forfeiture or punishment and any legal proceeding initiated during the currency of the repealed enactment could be continued as if the repe....
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....d by Chaudhary is dismissed as not pressed. In the facts and circumstances of the case, there will be no order as to costs. Notes:- ............................ 1. Civil Appeal Nos.14678 of 2015 and 1881 of 2016 2. Civil Appeal No.13784/2015. 3. Section 2(19). "Society" means a co-operative society registered, or deemed to be registered, under this Act;" 4. Section 2(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; 5. Though the notice purported to have been issued invoking both sub-sections (1) and (2) of Section 76B, there is no whisper in the said notice regarding the proposal to disqualify Chaudhary for a further period. 6. Thus, taking into consideration the facts as a whole, because of the irregularities 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 connect....
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...." 11. See F/N 5 In view of the subsequent development, it is not necessary for us to examine the meaning of the expression "sahakari mandal" 12. In our opinion, LPA No.1302/2015 ought to have been dismissed on the simple ground that the said appeal had become infructuous. Because admittedly the tenure of Chaudhary as Chairman of the Society expired on 01.05.2014. Therefore, SLP (Civil) No.33630/2015 was a futile exercise. We only wonder as to how leave came to granted in the said SLP. 13. "Para 19. ... the contentions raised on behalf of the petitioner are that there was no notice in the eye of law for proposed action of disqualification and that it would be only after order for removal is passed, the action under Section 76B(2) of the Act could be taken and therefore, issuance of the combined notice under Section 76B(1) and (2) of the Act was not permissible. ..." 14. "Para 20. ... Therefore, in the context of the provision of Section 76B of the Act, the Court needs to examined whether before the order of removal could be made, action for disqualification under sub-section (2) could be initiated and whether separate order is required for disqualification under sub-s....
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....on once convicted or acquitted not to be tried for same offence.- (1) A person who has once been tried by a Court of competent jurisdiction for an offence and convicted or acquitted of such offence shall, while such conviction or acquittal remains in force, not be liable to be tried again for the same offence, nor on the same facts for any other offence for which a different charge from the one made against him might have been made under sub- section (1) of section 221, or for which he might have been convicted under sub- section (2) thereof. 21. Superintendent (Tech.I) Central Excise I.D.D. Jabalpur & Others v. Pratap Rai, (1978) 3 SCC 113 "Para 6. In the case of Thimmasamudram Tobacco Co. v. Assistant Collector of Central Excise, Nellore Division, Nellore [AIR 1961 AP 324] while construing the provisions of the Central Excise and Salt Act which was almost on identical terms as the Customs Act, a Division Bench of the Andhra Pradesh High Court observed as follows (AIR p. 325, para 11): "Assuming that Section 35 of the Central Excise Act does not clothe the appellate authority with power to remand the matter to the officer whose order is appealed against, nothing stands in th....