REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.10392 OF 2014
(Arising out of SLP(C) No. 26017 Of 2013)
RAJKOT DISTT COOPERATIVE BANK LTD. .........APPELLANT
Vs.
STATE OF GUJARAT & ORS. .........RESPONDENTS
WITH
CIVIL APPEAL NOS.10393-10394 OF 2014
(Arising out of SLP (C)Nos. 13201-13202 Of 2012),
CIVIL APPEAL NOS.10395-10398 OF 2014
(Arising out of SLP (C)Nos.12219-12222 Of 2012),
CIVIL APPEAL NO.10399 OF 2014
(Arising out of SLP (C) No. 29726 Of 2013),
CIVIL APPEAL NO.10400 OF 2014
(Arising out of SLP (C) No. 27573 Of 2013),
CIVIL APPEAL NO.10401 OF 2014
(Arising out of SLP (C) No. 29727 Of 2013)
And
CIVIL APPEAL NO. 10402 OF 2014
(Arising out of SLP (C) No. 29728 Of 2013
J U D G M E N T
V.GOPALA GOWDA, J.
The applications for impleadment filed in the SLP(C) Nos. 29726 of
2013, 29727 of 2013 and 29728 of 2013 are allowed. Leave granted in all the
special leave petitions.
2. The appellants before this Court have filed these appeals questioning
the correctness of the impugned orders dated 15.11.2011, 30.1.2012 (passed
by the Division Bench) and common impugned order dated 04.07.2013 (passed
by the full Bench) of the High Court of Gujarat at Ahmedabad.
3. Since all the appeals are identical in nature, we would refer to the
facts of the case arising out of Civil Appeal @ SLP(C) NO. 26017 of 2013
for the sake of convenience and brevity and for examining the rival legal
contentions urged in these appeals.
4. The State of Gujarat enacted and put on the statute book, Gujarat
Cooperative Societies Act of 1961 (in short "the Act") in order to
consolidate and amend the laws relating to the cooperative societies in the
State of Gujarat. Thereafter, the Act was amended by the Act of 1982.
Initially, as per the Act of 1961, the Managing Committee of the Co-
operative Society was to be constituted in accordance with the Act, Rules
and bye-laws. By the Act of 1982, the proviso was inserted by way of an
amendment to the effect that so far as the committee of a society falling
in the category of Section 74C(1) of the Act is concerned, the rotation for
retirement, if provided by the bye-laws of a particular number of members
of the Managing Committee shall cease to remain in force.
5. Further, as per the Act of 1982, Section 74C together with the other
provisions of the amending Act was brought on the statute book, which
provided that the election of the members of the Managing Committee/Board
and the office bearers on the committees of such specified societies shall
be conducted in the manner laid down by or under Chapter XI-A of the Act,
which was also simultaneously inserted by way of amendment Act of 1982, for
conducting elections to the committees and office bearers of certain
societies which are so specified under Section 74C(1) of the Act. As per
the scheme of the said chapter, the election of such specified societies is
required to be held on such date or dates as the Collector may fix under
his control. Prior to the amendment, the election of the managing
committee was to be conducted by the society itself as per its registered
bye-laws. So far as the societies included as specified societies under
Section 74C(1) of the Act are concerned, a separate mode of conducting
election was provided and the power of conducting such election was given
to the Collector notwithstanding anything contained in the bye-laws of such
societies. The said aspect was made clear under the provisions of Section
74(C) (2) and (3) of the Act which were inserted by way of amending Act of
1982. Chapter XI-A of the Act provides for separate mode for deciding the
election dispute by Election Tribunal. Section 145(U) of the Act provided
the State Government with rule making power and to regulate all or any of
the other matters relating to the various stages of elections including
preparation of the list of voters.
6. In exercise of the powers conferred upon the State Government under
Section 168 read with Sections 145(A), 145(U) and 145(Y), the State
Government of Gujarat framed the Gujarat Specified Co-operative Societies
Election to Committee Rules of 1982 (in short "the Rules"). These Rules
provide for various stages of election from the preparation of the voters
list till the result is declared and further consequential steps to be
taken in the process. In the year 1987, Rules 3-A and 3-B were inserted in
the Rules of 1982 by the Rule Making Authority which provided for
delimitation of the constituencies in the respective society/societies, for
the purpose of conducting election of the Managing Committee Members and a
separate procedure was provided for election of members reserved in sub-
section (1) of Section 74B of the Act.
7. The constitutional validity of the amended provisions of the Act of
1982 was challenged before the High Court in the case of Amreli District Co-
operative Sale and Purchase Union Ltd. v. State of Gujarat[1]. The Division
Bench of the High Court declared Sections 17(A), 24, 51(2), 69 and also the
proviso to Section 74 as ultra vires the Constitution. However, the
provisions of Sections 74A, 74B, 74C, 74D, 76A, 76B, 80(A) and 80(2) were
upheld. The said matters were carried before this Court, but subsequently
came to be withdrawn. Therefore, the decision of the Gujarat High Court in
the aforesaid case became final and has been operating since.
8. Subsequently, certain provisions were deleted but Section 74C and
other provisions in relation to the conduct of election, including Chapter
XI A and the Rules, remained in the statute book. Therefore, legal
position remained as per the original Act even after the Amendment Act of
1982. The election of the Managing Committee members of a society other
than the specified societies was required to be held as per the bye laws of
such societies. Whereas, so far as the specified societies covered by
Section 74C(1) of the Act are concerned, the election was required to be
held as per Chapter XI A read with the Rules of 1982.
9. A legal question for interpretation to Rule 3-A (8) and also the
validity of bye-laws clause No. 35(1)(A) of Sabarkantha Milk Producers
Union Ltd. arose before the High Court in the case of Antakampa Milk
Producers Co-operative Society Limited v. Sabarkantha Milk Producers Union
Ltd.[2]. The learned Single Judge of the High Court in the said case held
that Section 74C sub Section (3) of the Act, has an overriding effect on
any other bye-laws of such society. It was also found that as per Rule 3-A
(8), the number of constituencies have to be equal to the total number of
seats excluding two reserved seats as provided under Section 74B of the
Act. The learned Single Judge in the said case found that the bye law No.
35(1)(A), provided seats for more than one person for each constituency and
therefore, the bye laws were not in conformity with Rule 3-A (8) of the
Rules and found that the bye-laws can operate to the extent of 7
representatives to be elected from 7 separate constituencies of a Specified
Cooperative Society and therefore, the High Court has held the Rule 3-A(8)
of the Rules as valid to that extent only.
10. In the meanwhile, the Division Bench of the Gujarat High Court in the
case of Shri Sadwadar Seva Sahkari Mandali Ltd. & Ors. v. State of
Gujarat[3], went into the case once again with regard to the holding of the
election to the Managing Committee of the Bank in accordance with Rule 3-A
(8) of the Rules. The Division Bench found that when Rule 3-A (8) and Rule
43 are examined in juxtaposition, it has held that the object and
intendment of the said Rules and the field of the operation of the said two
provisions are different inasmuch as the former deals with "constituencies"
bifurcated on the "territorial/zone basis". The Division Bench did
consider the view taken by the learned Single Judge of Gujarat High Court
in the case of Antakampa Milk Producers Co-operative Society Limited
(supra) and found that in the said case, the constituencies were bifurcated
zone or territory wise.
11. Again the question for consideration of the provisions of Rule 3-A
(8) read with Section 74C of the Act arose in the case of Khanodar Milk
Producers Co-operative Societies Ltd. and Others v. State of Gujarat[4].
The second Division Bench of the High Court found that the bye law
providing more than one representative to be elected in more than one
constituency would be in contravention of Rule 3-A (8) and it is held that,
in the case of Sadvadar Sahkari (supra), the members of the society were
comprised of various classes of societies, whereas in the case of Antakampa
Milk Producers Cooperative Society Ltd., the members constituted
homogeneous group and not heterogeneous group. Therefore, adopting the
decision of the case Antakampa Milk Producers Cooperative Society Ltd., the
Division Bench set aside the bye laws clause No. 35 (1) of the said Society
which provides for voting right for more than one seat in one constituency.
12. Further, the constitutional validity of Rule 3-A (8) of the Rules was
again challenged before the High Court of Gujarat, in the case of
Banaskantha District Cooperative Milk Producers Union Ltd. v. State of
Gujarat[5], wherein the Division Bench of the High Court held that if any
of the Rules are lawfully framed under the provisions of the Act and
restrictions were imposed in relation to the subject matter of any of the
clauses of the registered bye laws of the Society, such restrictions must
be adhered to by it and any such clause in the bye-laws which is in
violation of the restriction imposed by the Rules should be deleted. It was
further held that the State Government while framing the impugned
provisions of the Rules has not deviated from the principles mentioned
under Section 74C (3) of the Act, but it has only created a position by
making provisions of the election of members from the General Body. The
Division Bench of the High Court held that Rule 3-A (8) of the Rules is
neither in conflict with any of the provisions of the Act nor was it held
to be bad in law for want of Authority of the delegated legislation.
Therefore, Rule 3-A(8) of the Rules was held to be legal and valid by the
High Court by giving its reasons.
13. Similar questions regarding the legality and validity of Rule 3-A(8)
of the Rules arose when the present group of appeals were listed before the
High Court. The Division Bench of the High Court formulated the following
legal issues and referred the same to the full Bench:
Whether Rule 3-A of the Rules introduced by the amendment dated 10.08.1987
could be applied to the societies bye-laws which provide for a single
constituency?
Whether the scheme of the Rules permit the specified societies having a
single constituency, more than one seat for one constituency and whether
members of such society can legally be permitted to vote for more than one
seat?
Whether Collector has jurisdiction to make an order for delimitation of the
constituencies, in absence of any proceeding undertaken in accordance with
Section 14 of the Act?
Whether delimitation of the constituencies under Rule 3-A of the Rules can
only be territory-wise and/or whether delimitation of the constituencies
can be based upon objects and activities of the member societies or classes
of individual members?
After hearing the learned counsel for both sides, the full Bench of the
High Court answered the legal questions against the appellant-societies by
passing the impugned judgment and orders which are challenged in these
appeals before this Court urging various legal grounds.
14. We have heard the learned counsel on both the sides. It is contended by
the learned Senior Counsel for the appellants that the findings and reasons
recorded in the impugned judgment while answering the questions of law on
the points referred to the Full Bench are not only erroneous but also
suffers from error in law. Reliance was placed by them upon the judgment of
this Court in the case of Ziley Singh v. Registrar Cane Cooperative
Societies Lucknow[6]. It is contented that the Rule 3-A (8) of the Rules is
contrary to the bye-laws of the appellant-Societies and the statutory
provisions of the Act. The Act provides for amendments of the bye laws
without allowing the societies to get their bye laws amended as per the
procedure laid under the provisions of the Act and without laying down
certain guidelines in the Rules for the amendment of the relevant clauses
of the registered bye-laws of the appellant-Societies. Rule 3-A (8) takes
away the vested rights conferred upon the members of the society. The
conferment of power upon the Collector for carving out delimitations of a
Specified Co-operative Society/Societies is contrary to the provisions of
the Act and Rules and asking the Chief Executive Officer to prepare the
draft constituencies by dividing the area of societies into constituencies
would amount to taking away the right of its members to exercise their vote
in favour of all the candidates who contest from the constituencies.
Therefore, the interpretation given to Section 3-A (8) of the Rules and
upholding the constitutional validity in conferring such power upon the
Collector to demark the constituencies of appellant societies infringes the
rights of the members of the societies. Hence, it is contended that the
impugned judgment is liable to be set aside.
15. The State Government has filed its counter affidavit justifying the
impugned judgment contending that the findings and reasons recorded by the
full Bench of the Gujarat High Court by answering the questions referred to
it are in accordance with law and the same are on proper interpretation of
the relevant Rules 3-A (8) and (9) and Rule 43 of the Rules which are in
conformity with Chapter XI-A of the Act.
16. On a careful examination of Rule 3-A (8) of the Rules by us, it is
made clear that the said provision is aimed at geographical i.e. territory
or zone wise bifurcation or division. A salient feature of the Rule 3-A is
the delimitation of the constituencies which includes all specified
cooperative societies. Once the area of operation of any society is more
than one village, Sub rule (8) would come into play and the requirement of
the number of constituencies would be equal to the total number of seats,
excluding two seats reserved for the categories as provided under section
74 B of the Act.
17. Further, the language of sub rule (9) of Rule 3-A, makes it clear
that the Rule Making Authority has graced the Collector with the power to
delimit the constituency/constituencies prior to the publication of the
voters list. The delimitation of the constituency/constituencies should be
prior to the preparation of the voters' list and/or in any case
simultaneous with the preparation of voters' list but the voters list has
to be as per the delimitation of the constituencies. The same is the case
when the delimitation of the constituency is required to be made by the
Collector prior to the publication of the list of voters.
18. Thus, when sub-rule (8) is read along with sub-rule (9) of Rule 3-A,
where the society has the area of operation exceeding one village, even if
the bye laws provide for single constituency, the seats provided by the bye
laws has to be equal to the number of constituency/constituencies and
therefore, for each seat, a separate constituency would be required to be
delimited and if not so delimited by the society, of its own, it would be
required for the Collector to exercise his power under sub rule (9) of Rule
3-A of the Rules for the delimitation of the constituency in accordance
with the mandate of sub rule (8) of Rule 3-A and thereafter, the process
for publication of the voters' list is to be given effect to.
19. The power conferred with the Collector for the delimitation of the
constituency under sub rule (9) is independent and separate and only
applicable in the case when the election of the members of any Management
Committee of specified society is scheduled to be held. Further, as
specified in the sub rule (9) of Rule 3-A, such powers are to be exercised
by the Collector, notwithstanding anything contained in the bye laws of
such society. The Collector has to exercise the power for delimitation of
the constituencies prior to the publication of the list of voters. Further,
as rightly stated by the High Court in the impugned judgment that when a
specific power is conferred in a specific contingency to a different
authority, such power has to be read in addition to the general power for
the amendment in the bye-laws. Thus, the bye laws of any society have to be
in conformity with the provisions of the Act and the Rules.
20. It is obligatory on the part of any specified society to bring about
the amendment in its registered bye-laws in conformity with the
provisions of the Rules and more particularly Rule 3-A (8) and (9).
But if the society/societies have not amended their bye laws, the same has
to be in conformity with the said Rules by getting suitably amended; the
effect of the Rule would not stand nullified or inoperable. For this
purpose sub rule (9) gives the power to the Collector to delimit the
constituency/constituencies of a society. Thus, once the area of operation
of any society exceeds more than one village as per sub rule (8), the
number of constituencies is required to be bifurcated by the Collector in
exercise of his power, so as to make it equal to the total number of seats
to see that effective representation is given to the members of the society
for giving fair representation to its members to elect their true
representatives to participate in the affairs of the Society as part of the
Managing Committee Members, as the society must be represented by its
elected representatives in a democratic process to effectively represent in
the Managing Committee which is an indispensible parameter for the
democratic institutions to achieve the laudable object of Co-operative
movement in the country, which is the constitutional philosophy as
enshrined in Chapter XI A of the Constitution, which has been inserted by
way of constitutional amendment.
21. Thus, the bye laws of any specified society under the provisions of
the Co-operative Societies Act cannot be permitted to prevail over the
statutory Rule 3-A (8) & (9) of the Rules. The moment the area of operation
of any specified society exceeds one village, sub rule (8) would come into
play, irrespective of the fact that whether members of such society
constitute homogenous group or heterogeneous group.
22. Further, the elections to either the Managing Committee or Board must
be held democratically by giving representation to all its members, as
stated in the preamble of our Constitution, which is held to be the basic
feature of the Constitution by the constitutional Bench of this Court in
the cases of Kesavananda Bharati Sripadagalvaru v. State of Kerala[7] and
Kuldip Nayar v. Union of India[8]. Under Article 13 (2) of the Constitution
of India, Rules are also regarded as laws. However, the Rules and laws
framed by the State Legislatures and the appropriate government cannot run
parallel with the principles of the Constitution and the statutory objects
of the Co-operative Societies Act cannot be disregard as it would defeat
the purpose of Section 243ZK of the Constitution of India (Ninety-Seventh
Amendment) Act 2011, inserted as per the 97th Constitutional Amendment,
which provides for election of the members of the Managing Committee or
Board. If the rules provide
that not more than 7 representatives can be elected from a specified Co-
operative Society to the Board or Management Committee, then it is the duty
of the societies to adhere to it and not exceed the specified number. Thus,
the bye laws of a Co-operative Society, in order to achieve the
constitutional object, must be brought at par with the laws and statutory
provisions of the Societies Act. They cannot override the provisions of
State or Central laws. In Kuldip Nayar's case (supra), this Court after
referring to various Constitutional Bench judgments and other judgments of
this Court for the purpose of interpretation made by this Court in relation
to phrases used in the Preamble of the Constitution of India such as
"sovereign democratic republic" and "Parliamentary democracy" as the basic
feature of the Constitution of India, held as under:-
"101. In the same case (Indira Nehru Gandhi case, reported in 1975 Supp SCC
1), Chandrachud, J. in para 691 of his separate judgment ruled as under:
(SCC pp. 261-62)
"Ordinary laws have to answer two tests for their validity: (1) The law
must be within the legislative competence of the legislature as defined and
specified in Chapter I, Part XI of the Constitution, and (2) it must not
offend against the provisions of Articles 13(1) and (2) of the
Constitution. 'Basic structure', by the majority judgment, is not a part of
the fundamental rights nor indeed a provision of the Constitution. The
theory of basic structure is woven out of the conspectus of the
Constitution and the amending power is subjected to it because it is a
constituent power. 'The power to amend the fundamental instrument cannot
carry with it the power to destroy its essential features'-this, in brief,
is the arch of the theory of basic structure. It is wholly out of place in
matters relating to the validity of ordinary laws made under the
Constitution."
XXX XXX XXX
142. Article 80(4) prescribes the manner of voting and election of the
representatives of States for the Council of States in the following terms:
"80. (4) The representatives of each State in the Council of States shall
be elected by the elected Members of the Legislative Assembly of the State
in accordance with the system of proportional representation by means of
the single transferable vote."
XXX XXX XXX
336. In the words of Jaganmohan Reddy, J.(Kesavananda Bharati case reported
in (1973) 4 SCC 225) in his separate judgment, the 1"elements of the basic
structure are indicated in the Preamble and translated in the various
provisions of the Constitution" and the "edifice of our Constitution is
built upon and stands on several props" which, if removed would result in
the Constitution collapsing and which include the principles of "sovereign
democratic republic" and "parliamentary democracy", a polity which is
"based on a representative system in which people holding opposing view to
one another can be candidates and invite the electorate to vote for them"
(SCC p. 638, para 1159).
341. Some of the important holdings were set down in para 92 of the
aforementioned (Mohinder Singh Gill v. Chief Election Commr. reported in
(1978) 1 SCC 405) judgment "for convenience" and to "synopsise the
formulations". The holdings included the following: (SCC p. 452)
[pic]"92. (2)(a) The Constitution contemplates a free and fair
election and vests comprehensive responsibilities of superintendence,
direction and control of the conduct of elections in the Election
Commission. This responsibility may cover powers, duties and functions of
many sorts, administrative or other, depending on the circumstances.
(b) Two limitations at least are laid on its plenary character in the
exercise thereof. Firstly, when Parliament or any State Legislature has
made valid law relating to or in connection with elections, the Commission,
shall act in conformity with, not in violation of, such provisions but
where such law is silent Article 324 is a reservoir of power to act for the
avowed purpose of, not divorced from, pushing forward a free and fair
election with expedition. Secondly, the Commission shall be responsible to
the rule of law, act bona fide and be amenable to the norms of natural
justice insofar as conformance to such canons can reasonably and
realistically be required of it as fairplay-in-action in a most important
area of the constitutional order viz. elections. Fairness does import an
obligation to see that no wrongdoer candidate benefits by his own wrong. To
put the matter beyond doubt, natural justice enlivens and applies to the
specific case of order for total re-poll, although not in full panoply but
in flexible practicability. Whether it has been complied with is left open
for the Tribunal's adjudication."
343. The case Kihoto Hollohan v. Zachillhu (reported in (1992 Supp (2) SCC
651) also resulted in similar views being reiterated by this Court in the
following words: (SCC p. 741, para 179)
"179. Democracy is a part of the basic structure of our Constitution; and
rule of law, and free and fair elections are basic features of democracy.
One of the postulates of free and fair elections is provision for
resolution of election disputes as also adjudication of disputes relating
to subsequent disqualifications by an independent authority."
(emphasis laid by this Court)
In Rameshwar Prasad (VI) v. Union of India[9], this Court has held as
under:-
"229. Lord Greene said in 1948 in the famous Wednesbury case (reported in
(1948) 1 KB 223) that when a statute gave discretion to an administrator to
take a decision, the scope of judicial review would remain limited. He said
that interference was not permissible unless one or the other of the
following conditions was satisfied, namely the order was contrary to law,
or relevant factors were not considered, or irrelevant factors were
considered; or the decision was one which no reasonable person could have
taken.......
257. Therefore, the well-recognised position in law is that purity in the
electoral process and the conduct of the elected representatives cannot be
isolated from the constitutional requirements. "Democracy" and "free and
fair election" are inseparable twins. There is almost an inseverable
umbilical cord joining them. In a democracy the little man-voter has
overwhelming [pic]importance and cannot be hijacked from the course of free
and fair elections......".
(emphasis laid by this Court)
In Mohinder Singh Gill v. Chief Election Commr.[10], this Court has held as
under:-
"2. Every significant case has an unwritten legend and indelible lesson.
This appeal is no exception, whatever its formal result. The message, as we
will see at the end of the decision, relates to the pervasive philosophy of
democratic elections which Sir Winston Churchill vivified in matchless,
words:
"At the bottom of all tributes paid to democracy is the little man, walking
into a little booth, with a little pencil, making a little cross on a
little bit of paper - no amount of rhetoric or voluminous discussion can
possibly diminish the overwhelming importance of the point."
23. Democracy is government by the people. It is a continual participative
operation, not a cataclysmic, periodic exercise. The little man, in his
multitude, marking his vote at the poll does a social audit of his
Parliament plus political choice of this proxy. Although the full flower of
participative Government rarely blossoms, the minimum credential of popular
Government is appeal to the people after every term for a renewal of
confidence. So we have adult franchise and general elections as
constitutional compulsions. "The right of election is the very essence of
the constitution" (Junius). It needs little argument to hold that the heart
of the Parliamentary system is free and fair elections periodically held,
based on adult franchise, although social and economic democracy may demand
much more.
46. It is an interesting sidelight that in America it has been held to be
but fundamental fairness that the right to an administrative hearing is
given. Natural justice is being given access to the United Nations. It is
notable that Mathew, J. observed in Indira Gandhi (p. 513, see p. 128, para
303)(reported in 1975 Supp SCC 1):
"If the amending body really exercised judicial power, that power was
exercised in violation of the principles of natural justice of audi alteram
partem. Even if a power is given to a body without specifying that the
rules of natural justice should be observed in exercising it, the nature of
the power would call for its observance............"
(emphasis laid by this Court)
In view of the law laid down by this Court in the aforesaid cases, we have
to hold that the sub rules (8) & (9) of Rule 3-A are applicable to the
appellant society/Societies as the area of operation is more than one
village and therefore the orders passed by the Collector for the
delimitation of the constituency/constituencies cannot be said to be
illegal. Further, we hold that there will be no proper representation of
the voters to their respective specified societies for electing
representatives of their area which would materially affect the result of
the election and the impugned provisions and Rules are legally justifiable.
For the reasons stated supra, no relief can be granted in favour of
the appellant-societies by setting aside the election notification and the
prayer for setting aside the impugned judgement and orders. Hence, they
deserve to be dismissed. The respondents are directed to hold the election
to the specified societies as per sub rule (8) and (9) of Rule 3-A of the
Rules as are applicable to them under the Gujarat Co-operative Societies
Act after the delimitation of the constituency/constituencies of such
societies are made by the Collector as stated under sub-rule (9) of Rule 3-
A of the Rules.
23. For the reasons stated supra, we do not find any reasons whatsoever
to interfere with the impugned judgment and orders of the High Court. It is
needless to make observation that the State government and its officers
could not give effect to the provisions of the Co-operative Societies Act
and Rules for some time on account of which some of the societies have
challenged the impugned provisions and Rules before the High Court, even
after litigation was concluded by the Division Bench at one stage, the
State and its officers have not implemented the impugned provisions and
Rules without any valid reasons. The members of the specified societies in
the State have a right to elect their true representatives to represent
them as Managing Committee or Board members of the District Co-operative
Societies and other allied societies after de-limitation of the
constituency/ constituencies and therefore, we direct them to see that the
impugned provisions and Rules must be implemented forthwith without further
delay and submit compliance report within 8 weeks from the date of report
of the copy of this order.
24. The appeals are dismissed. No Costs.
.....................................................................J.
[V. GOPALA GOWDA]
.....................................................................J.
[ADARSH KUMAR GOEL]
New Delhi,
November 19, 2014
ITEM NO.1A-For Judgment COURT NO.11 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
C.A.NO............/2014 ARISING FROM SLP(C) No(s). 26017/2013
RAJKOT DISTT COOPERATIVE BANK LTD Petitioner(s)
VERSUS
STATE OF GUJARAT AND ORS Respondent(s)
WITH
C.A.NO............/2014 ARISING FROM SLP(C) No. 13201-13202/2012
C.A.NO............/2014 ARISING FROM SLP(C) No. 12219-12222/2012
C.A.NO............/2014 ARISING FROM SLP(C) No. 29726/2013
C.A.NO............/2014 ARISING FROM SLP(C) No. 27573/2013
C.A.NO............/2014 ARISING FROM SLP(C) No. 29727/2013
C.A.NO............/2014 ARISING FROM SLP(C) No. 29728/2013
Date : 19/11/2014 These appeals was called on for JUDGMENT today.
For Petitioner(s)
Mr. Mohit D. Ram,Adv.
M/s. Khaitan & Co.
Mr. Devendra Singh,Adv.
Mr. Aniruddha P. Mayee,Adv.
Mr. Subramonium Prasad,Adv.
For Respondent(s) Ms. Hemantika Wahi,Adv.
Ms. Pratibha Jain,Adv.
Mr. A. Venayagam Balan,Adv.
Mr. Vikash Singh,Adv.
Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment of
the Bench comprising His Lordship and Hon'ble Mr. Justice Adarsh Kumar
Goel.
Leave granted.
The appeals are dismissed in terms of the signed judgment.
(VINOD KUMAR) (MALA KUMARI SHARMA)
COURT MASTER COURT MASTER
(Signed Reportable judgment is placed on the file)
-----------------------
[1] (1984) 2 GLR 1244
[2] (2004)1 GLR 310
[3] (2010) 3 GLR 2154
[4] (2012)1 GLH 245
[5] (2012) 2 GLR 1522
[6] (1972) 1 SCC 719
[7] (1973) 4 SCC 225
[8] (2006)7 SCC 1
[9] (2006) 2 SCC 1
[10] (1978) 1 SCC 405
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.10392 OF 2014
(Arising out of SLP(C) No. 26017 Of 2013)
RAJKOT DISTT COOPERATIVE BANK LTD. .........APPELLANT
Vs.
STATE OF GUJARAT & ORS. .........RESPONDENTS
WITH
CIVIL APPEAL NOS.10393-10394 OF 2014
(Arising out of SLP (C)Nos. 13201-13202 Of 2012),
CIVIL APPEAL NOS.10395-10398 OF 2014
(Arising out of SLP (C)Nos.12219-12222 Of 2012),
CIVIL APPEAL NO.10399 OF 2014
(Arising out of SLP (C) No. 29726 Of 2013),
CIVIL APPEAL NO.10400 OF 2014
(Arising out of SLP (C) No. 27573 Of 2013),
CIVIL APPEAL NO.10401 OF 2014
(Arising out of SLP (C) No. 29727 Of 2013)
And
CIVIL APPEAL NO. 10402 OF 2014
(Arising out of SLP (C) No. 29728 Of 2013
J U D G M E N T
V.GOPALA GOWDA, J.
The applications for impleadment filed in the SLP(C) Nos. 29726 of
2013, 29727 of 2013 and 29728 of 2013 are allowed. Leave granted in all the
special leave petitions.
2. The appellants before this Court have filed these appeals questioning
the correctness of the impugned orders dated 15.11.2011, 30.1.2012 (passed
by the Division Bench) and common impugned order dated 04.07.2013 (passed
by the full Bench) of the High Court of Gujarat at Ahmedabad.
3. Since all the appeals are identical in nature, we would refer to the
facts of the case arising out of Civil Appeal @ SLP(C) NO. 26017 of 2013
for the sake of convenience and brevity and for examining the rival legal
contentions urged in these appeals.
4. The State of Gujarat enacted and put on the statute book, Gujarat
Cooperative Societies Act of 1961 (in short "the Act") in order to
consolidate and amend the laws relating to the cooperative societies in the
State of Gujarat. Thereafter, the Act was amended by the Act of 1982.
Initially, as per the Act of 1961, the Managing Committee of the Co-
operative Society was to be constituted in accordance with the Act, Rules
and bye-laws. By the Act of 1982, the proviso was inserted by way of an
amendment to the effect that so far as the committee of a society falling
in the category of Section 74C(1) of the Act is concerned, the rotation for
retirement, if provided by the bye-laws of a particular number of members
of the Managing Committee shall cease to remain in force.
5. Further, as per the Act of 1982, Section 74C together with the other
provisions of the amending Act was brought on the statute book, which
provided that the election of the members of the Managing Committee/Board
and the office bearers on the committees of such specified societies shall
be conducted in the manner laid down by or under Chapter XI-A of the Act,
which was also simultaneously inserted by way of amendment Act of 1982, for
conducting elections to the committees and office bearers of certain
societies which are so specified under Section 74C(1) of the Act. As per
the scheme of the said chapter, the election of such specified societies is
required to be held on such date or dates as the Collector may fix under
his control. Prior to the amendment, the election of the managing
committee was to be conducted by the society itself as per its registered
bye-laws. So far as the societies included as specified societies under
Section 74C(1) of the Act are concerned, a separate mode of conducting
election was provided and the power of conducting such election was given
to the Collector notwithstanding anything contained in the bye-laws of such
societies. The said aspect was made clear under the provisions of Section
74(C) (2) and (3) of the Act which were inserted by way of amending Act of
1982. Chapter XI-A of the Act provides for separate mode for deciding the
election dispute by Election Tribunal. Section 145(U) of the Act provided
the State Government with rule making power and to regulate all or any of
the other matters relating to the various stages of elections including
preparation of the list of voters.
6. In exercise of the powers conferred upon the State Government under
Section 168 read with Sections 145(A), 145(U) and 145(Y), the State
Government of Gujarat framed the Gujarat Specified Co-operative Societies
Election to Committee Rules of 1982 (in short "the Rules"). These Rules
provide for various stages of election from the preparation of the voters
list till the result is declared and further consequential steps to be
taken in the process. In the year 1987, Rules 3-A and 3-B were inserted in
the Rules of 1982 by the Rule Making Authority which provided for
delimitation of the constituencies in the respective society/societies, for
the purpose of conducting election of the Managing Committee Members and a
separate procedure was provided for election of members reserved in sub-
section (1) of Section 74B of the Act.
7. The constitutional validity of the amended provisions of the Act of
1982 was challenged before the High Court in the case of Amreli District Co-
operative Sale and Purchase Union Ltd. v. State of Gujarat[1]. The Division
Bench of the High Court declared Sections 17(A), 24, 51(2), 69 and also the
proviso to Section 74 as ultra vires the Constitution. However, the
provisions of Sections 74A, 74B, 74C, 74D, 76A, 76B, 80(A) and 80(2) were
upheld. The said matters were carried before this Court, but subsequently
came to be withdrawn. Therefore, the decision of the Gujarat High Court in
the aforesaid case became final and has been operating since.
8. Subsequently, certain provisions were deleted but Section 74C and
other provisions in relation to the conduct of election, including Chapter
XI A and the Rules, remained in the statute book. Therefore, legal
position remained as per the original Act even after the Amendment Act of
1982. The election of the Managing Committee members of a society other
than the specified societies was required to be held as per the bye laws of
such societies. Whereas, so far as the specified societies covered by
Section 74C(1) of the Act are concerned, the election was required to be
held as per Chapter XI A read with the Rules of 1982.
9. A legal question for interpretation to Rule 3-A (8) and also the
validity of bye-laws clause No. 35(1)(A) of Sabarkantha Milk Producers
Union Ltd. arose before the High Court in the case of Antakampa Milk
Producers Co-operative Society Limited v. Sabarkantha Milk Producers Union
Ltd.[2]. The learned Single Judge of the High Court in the said case held
that Section 74C sub Section (3) of the Act, has an overriding effect on
any other bye-laws of such society. It was also found that as per Rule 3-A
(8), the number of constituencies have to be equal to the total number of
seats excluding two reserved seats as provided under Section 74B of the
Act. The learned Single Judge in the said case found that the bye law No.
35(1)(A), provided seats for more than one person for each constituency and
therefore, the bye laws were not in conformity with Rule 3-A (8) of the
Rules and found that the bye-laws can operate to the extent of 7
representatives to be elected from 7 separate constituencies of a Specified
Cooperative Society and therefore, the High Court has held the Rule 3-A(8)
of the Rules as valid to that extent only.
10. In the meanwhile, the Division Bench of the Gujarat High Court in the
case of Shri Sadwadar Seva Sahkari Mandali Ltd. & Ors. v. State of
Gujarat[3], went into the case once again with regard to the holding of the
election to the Managing Committee of the Bank in accordance with Rule 3-A
(8) of the Rules. The Division Bench found that when Rule 3-A (8) and Rule
43 are examined in juxtaposition, it has held that the object and
intendment of the said Rules and the field of the operation of the said two
provisions are different inasmuch as the former deals with "constituencies"
bifurcated on the "territorial/zone basis". The Division Bench did
consider the view taken by the learned Single Judge of Gujarat High Court
in the case of Antakampa Milk Producers Co-operative Society Limited
(supra) and found that in the said case, the constituencies were bifurcated
zone or territory wise.
11. Again the question for consideration of the provisions of Rule 3-A
(8) read with Section 74C of the Act arose in the case of Khanodar Milk
Producers Co-operative Societies Ltd. and Others v. State of Gujarat[4].
The second Division Bench of the High Court found that the bye law
providing more than one representative to be elected in more than one
constituency would be in contravention of Rule 3-A (8) and it is held that,
in the case of Sadvadar Sahkari (supra), the members of the society were
comprised of various classes of societies, whereas in the case of Antakampa
Milk Producers Cooperative Society Ltd., the members constituted
homogeneous group and not heterogeneous group. Therefore, adopting the
decision of the case Antakampa Milk Producers Cooperative Society Ltd., the
Division Bench set aside the bye laws clause No. 35 (1) of the said Society
which provides for voting right for more than one seat in one constituency.
12. Further, the constitutional validity of Rule 3-A (8) of the Rules was
again challenged before the High Court of Gujarat, in the case of
Banaskantha District Cooperative Milk Producers Union Ltd. v. State of
Gujarat[5], wherein the Division Bench of the High Court held that if any
of the Rules are lawfully framed under the provisions of the Act and
restrictions were imposed in relation to the subject matter of any of the
clauses of the registered bye laws of the Society, such restrictions must
be adhered to by it and any such clause in the bye-laws which is in
violation of the restriction imposed by the Rules should be deleted. It was
further held that the State Government while framing the impugned
provisions of the Rules has not deviated from the principles mentioned
under Section 74C (3) of the Act, but it has only created a position by
making provisions of the election of members from the General Body. The
Division Bench of the High Court held that Rule 3-A (8) of the Rules is
neither in conflict with any of the provisions of the Act nor was it held
to be bad in law for want of Authority of the delegated legislation.
Therefore, Rule 3-A(8) of the Rules was held to be legal and valid by the
High Court by giving its reasons.
13. Similar questions regarding the legality and validity of Rule 3-A(8)
of the Rules arose when the present group of appeals were listed before the
High Court. The Division Bench of the High Court formulated the following
legal issues and referred the same to the full Bench:
Whether Rule 3-A of the Rules introduced by the amendment dated 10.08.1987
could be applied to the societies bye-laws which provide for a single
constituency?
Whether the scheme of the Rules permit the specified societies having a
single constituency, more than one seat for one constituency and whether
members of such society can legally be permitted to vote for more than one
seat?
Whether Collector has jurisdiction to make an order for delimitation of the
constituencies, in absence of any proceeding undertaken in accordance with
Section 14 of the Act?
Whether delimitation of the constituencies under Rule 3-A of the Rules can
only be territory-wise and/or whether delimitation of the constituencies
can be based upon objects and activities of the member societies or classes
of individual members?
After hearing the learned counsel for both sides, the full Bench of the
High Court answered the legal questions against the appellant-societies by
passing the impugned judgment and orders which are challenged in these
appeals before this Court urging various legal grounds.
14. We have heard the learned counsel on both the sides. It is contended by
the learned Senior Counsel for the appellants that the findings and reasons
recorded in the impugned judgment while answering the questions of law on
the points referred to the Full Bench are not only erroneous but also
suffers from error in law. Reliance was placed by them upon the judgment of
this Court in the case of Ziley Singh v. Registrar Cane Cooperative
Societies Lucknow[6]. It is contented that the Rule 3-A (8) of the Rules is
contrary to the bye-laws of the appellant-Societies and the statutory
provisions of the Act. The Act provides for amendments of the bye laws
without allowing the societies to get their bye laws amended as per the
procedure laid under the provisions of the Act and without laying down
certain guidelines in the Rules for the amendment of the relevant clauses
of the registered bye-laws of the appellant-Societies. Rule 3-A (8) takes
away the vested rights conferred upon the members of the society. The
conferment of power upon the Collector for carving out delimitations of a
Specified Co-operative Society/Societies is contrary to the provisions of
the Act and Rules and asking the Chief Executive Officer to prepare the
draft constituencies by dividing the area of societies into constituencies
would amount to taking away the right of its members to exercise their vote
in favour of all the candidates who contest from the constituencies.
Therefore, the interpretation given to Section 3-A (8) of the Rules and
upholding the constitutional validity in conferring such power upon the
Collector to demark the constituencies of appellant societies infringes the
rights of the members of the societies. Hence, it is contended that the
impugned judgment is liable to be set aside.
15. The State Government has filed its counter affidavit justifying the
impugned judgment contending that the findings and reasons recorded by the
full Bench of the Gujarat High Court by answering the questions referred to
it are in accordance with law and the same are on proper interpretation of
the relevant Rules 3-A (8) and (9) and Rule 43 of the Rules which are in
conformity with Chapter XI-A of the Act.
16. On a careful examination of Rule 3-A (8) of the Rules by us, it is
made clear that the said provision is aimed at geographical i.e. territory
or zone wise bifurcation or division. A salient feature of the Rule 3-A is
the delimitation of the constituencies which includes all specified
cooperative societies. Once the area of operation of any society is more
than one village, Sub rule (8) would come into play and the requirement of
the number of constituencies would be equal to the total number of seats,
excluding two seats reserved for the categories as provided under section
74 B of the Act.
17. Further, the language of sub rule (9) of Rule 3-A, makes it clear
that the Rule Making Authority has graced the Collector with the power to
delimit the constituency/constituencies prior to the publication of the
voters list. The delimitation of the constituency/constituencies should be
prior to the preparation of the voters' list and/or in any case
simultaneous with the preparation of voters' list but the voters list has
to be as per the delimitation of the constituencies. The same is the case
when the delimitation of the constituency is required to be made by the
Collector prior to the publication of the list of voters.
18. Thus, when sub-rule (8) is read along with sub-rule (9) of Rule 3-A,
where the society has the area of operation exceeding one village, even if
the bye laws provide for single constituency, the seats provided by the bye
laws has to be equal to the number of constituency/constituencies and
therefore, for each seat, a separate constituency would be required to be
delimited and if not so delimited by the society, of its own, it would be
required for the Collector to exercise his power under sub rule (9) of Rule
3-A of the Rules for the delimitation of the constituency in accordance
with the mandate of sub rule (8) of Rule 3-A and thereafter, the process
for publication of the voters' list is to be given effect to.
19. The power conferred with the Collector for the delimitation of the
constituency under sub rule (9) is independent and separate and only
applicable in the case when the election of the members of any Management
Committee of specified society is scheduled to be held. Further, as
specified in the sub rule (9) of Rule 3-A, such powers are to be exercised
by the Collector, notwithstanding anything contained in the bye laws of
such society. The Collector has to exercise the power for delimitation of
the constituencies prior to the publication of the list of voters. Further,
as rightly stated by the High Court in the impugned judgment that when a
specific power is conferred in a specific contingency to a different
authority, such power has to be read in addition to the general power for
the amendment in the bye-laws. Thus, the bye laws of any society have to be
in conformity with the provisions of the Act and the Rules.
20. It is obligatory on the part of any specified society to bring about
the amendment in its registered bye-laws in conformity with the
provisions of the Rules and more particularly Rule 3-A (8) and (9).
But if the society/societies have not amended their bye laws, the same has
to be in conformity with the said Rules by getting suitably amended; the
effect of the Rule would not stand nullified or inoperable. For this
purpose sub rule (9) gives the power to the Collector to delimit the
constituency/constituencies of a society. Thus, once the area of operation
of any society exceeds more than one village as per sub rule (8), the
number of constituencies is required to be bifurcated by the Collector in
exercise of his power, so as to make it equal to the total number of seats
to see that effective representation is given to the members of the society
for giving fair representation to its members to elect their true
representatives to participate in the affairs of the Society as part of the
Managing Committee Members, as the society must be represented by its
elected representatives in a democratic process to effectively represent in
the Managing Committee which is an indispensible parameter for the
democratic institutions to achieve the laudable object of Co-operative
movement in the country, which is the constitutional philosophy as
enshrined in Chapter XI A of the Constitution, which has been inserted by
way of constitutional amendment.
21. Thus, the bye laws of any specified society under the provisions of
the Co-operative Societies Act cannot be permitted to prevail over the
statutory Rule 3-A (8) & (9) of the Rules. The moment the area of operation
of any specified society exceeds one village, sub rule (8) would come into
play, irrespective of the fact that whether members of such society
constitute homogenous group or heterogeneous group.
22. Further, the elections to either the Managing Committee or Board must
be held democratically by giving representation to all its members, as
stated in the preamble of our Constitution, which is held to be the basic
feature of the Constitution by the constitutional Bench of this Court in
the cases of Kesavananda Bharati Sripadagalvaru v. State of Kerala[7] and
Kuldip Nayar v. Union of India[8]. Under Article 13 (2) of the Constitution
of India, Rules are also regarded as laws. However, the Rules and laws
framed by the State Legislatures and the appropriate government cannot run
parallel with the principles of the Constitution and the statutory objects
of the Co-operative Societies Act cannot be disregard as it would defeat
the purpose of Section 243ZK of the Constitution of India (Ninety-Seventh
Amendment) Act 2011, inserted as per the 97th Constitutional Amendment,
which provides for election of the members of the Managing Committee or
Board. If the rules provide
that not more than 7 representatives can be elected from a specified Co-
operative Society to the Board or Management Committee, then it is the duty
of the societies to adhere to it and not exceed the specified number. Thus,
the bye laws of a Co-operative Society, in order to achieve the
constitutional object, must be brought at par with the laws and statutory
provisions of the Societies Act. They cannot override the provisions of
State or Central laws. In Kuldip Nayar's case (supra), this Court after
referring to various Constitutional Bench judgments and other judgments of
this Court for the purpose of interpretation made by this Court in relation
to phrases used in the Preamble of the Constitution of India such as
"sovereign democratic republic" and "Parliamentary democracy" as the basic
feature of the Constitution of India, held as under:-
"101. In the same case (Indira Nehru Gandhi case, reported in 1975 Supp SCC
1), Chandrachud, J. in para 691 of his separate judgment ruled as under:
(SCC pp. 261-62)
"Ordinary laws have to answer two tests for their validity: (1) The law
must be within the legislative competence of the legislature as defined and
specified in Chapter I, Part XI of the Constitution, and (2) it must not
offend against the provisions of Articles 13(1) and (2) of the
Constitution. 'Basic structure', by the majority judgment, is not a part of
the fundamental rights nor indeed a provision of the Constitution. The
theory of basic structure is woven out of the conspectus of the
Constitution and the amending power is subjected to it because it is a
constituent power. 'The power to amend the fundamental instrument cannot
carry with it the power to destroy its essential features'-this, in brief,
is the arch of the theory of basic structure. It is wholly out of place in
matters relating to the validity of ordinary laws made under the
Constitution."
XXX XXX XXX
142. Article 80(4) prescribes the manner of voting and election of the
representatives of States for the Council of States in the following terms:
"80. (4) The representatives of each State in the Council of States shall
be elected by the elected Members of the Legislative Assembly of the State
in accordance with the system of proportional representation by means of
the single transferable vote."
XXX XXX XXX
336. In the words of Jaganmohan Reddy, J.(Kesavananda Bharati case reported
in (1973) 4 SCC 225) in his separate judgment, the 1"elements of the basic
structure are indicated in the Preamble and translated in the various
provisions of the Constitution" and the "edifice of our Constitution is
built upon and stands on several props" which, if removed would result in
the Constitution collapsing and which include the principles of "sovereign
democratic republic" and "parliamentary democracy", a polity which is
"based on a representative system in which people holding opposing view to
one another can be candidates and invite the electorate to vote for them"
(SCC p. 638, para 1159).
341. Some of the important holdings were set down in para 92 of the
aforementioned (Mohinder Singh Gill v. Chief Election Commr. reported in
(1978) 1 SCC 405) judgment "for convenience" and to "synopsise the
formulations". The holdings included the following: (SCC p. 452)
[pic]"92. (2)(a) The Constitution contemplates a free and fair
election and vests comprehensive responsibilities of superintendence,
direction and control of the conduct of elections in the Election
Commission. This responsibility may cover powers, duties and functions of
many sorts, administrative or other, depending on the circumstances.
(b) Two limitations at least are laid on its plenary character in the
exercise thereof. Firstly, when Parliament or any State Legislature has
made valid law relating to or in connection with elections, the Commission,
shall act in conformity with, not in violation of, such provisions but
where such law is silent Article 324 is a reservoir of power to act for the
avowed purpose of, not divorced from, pushing forward a free and fair
election with expedition. Secondly, the Commission shall be responsible to
the rule of law, act bona fide and be amenable to the norms of natural
justice insofar as conformance to such canons can reasonably and
realistically be required of it as fairplay-in-action in a most important
area of the constitutional order viz. elections. Fairness does import an
obligation to see that no wrongdoer candidate benefits by his own wrong. To
put the matter beyond doubt, natural justice enlivens and applies to the
specific case of order for total re-poll, although not in full panoply but
in flexible practicability. Whether it has been complied with is left open
for the Tribunal's adjudication."
343. The case Kihoto Hollohan v. Zachillhu (reported in (1992 Supp (2) SCC
651) also resulted in similar views being reiterated by this Court in the
following words: (SCC p. 741, para 179)
"179. Democracy is a part of the basic structure of our Constitution; and
rule of law, and free and fair elections are basic features of democracy.
One of the postulates of free and fair elections is provision for
resolution of election disputes as also adjudication of disputes relating
to subsequent disqualifications by an independent authority."
(emphasis laid by this Court)
In Rameshwar Prasad (VI) v. Union of India[9], this Court has held as
under:-
"229. Lord Greene said in 1948 in the famous Wednesbury case (reported in
(1948) 1 KB 223) that when a statute gave discretion to an administrator to
take a decision, the scope of judicial review would remain limited. He said
that interference was not permissible unless one or the other of the
following conditions was satisfied, namely the order was contrary to law,
or relevant factors were not considered, or irrelevant factors were
considered; or the decision was one which no reasonable person could have
taken.......
257. Therefore, the well-recognised position in law is that purity in the
electoral process and the conduct of the elected representatives cannot be
isolated from the constitutional requirements. "Democracy" and "free and
fair election" are inseparable twins. There is almost an inseverable
umbilical cord joining them. In a democracy the little man-voter has
overwhelming [pic]importance and cannot be hijacked from the course of free
and fair elections......".
(emphasis laid by this Court)
In Mohinder Singh Gill v. Chief Election Commr.[10], this Court has held as
under:-
"2. Every significant case has an unwritten legend and indelible lesson.
This appeal is no exception, whatever its formal result. The message, as we
will see at the end of the decision, relates to the pervasive philosophy of
democratic elections which Sir Winston Churchill vivified in matchless,
words:
"At the bottom of all tributes paid to democracy is the little man, walking
into a little booth, with a little pencil, making a little cross on a
little bit of paper - no amount of rhetoric or voluminous discussion can
possibly diminish the overwhelming importance of the point."
23. Democracy is government by the people. It is a continual participative
operation, not a cataclysmic, periodic exercise. The little man, in his
multitude, marking his vote at the poll does a social audit of his
Parliament plus political choice of this proxy. Although the full flower of
participative Government rarely blossoms, the minimum credential of popular
Government is appeal to the people after every term for a renewal of
confidence. So we have adult franchise and general elections as
constitutional compulsions. "The right of election is the very essence of
the constitution" (Junius). It needs little argument to hold that the heart
of the Parliamentary system is free and fair elections periodically held,
based on adult franchise, although social and economic democracy may demand
much more.
46. It is an interesting sidelight that in America it has been held to be
but fundamental fairness that the right to an administrative hearing is
given. Natural justice is being given access to the United Nations. It is
notable that Mathew, J. observed in Indira Gandhi (p. 513, see p. 128, para
303)(reported in 1975 Supp SCC 1):
"If the amending body really exercised judicial power, that power was
exercised in violation of the principles of natural justice of audi alteram
partem. Even if a power is given to a body without specifying that the
rules of natural justice should be observed in exercising it, the nature of
the power would call for its observance............"
(emphasis laid by this Court)
In view of the law laid down by this Court in the aforesaid cases, we have
to hold that the sub rules (8) & (9) of Rule 3-A are applicable to the
appellant society/Societies as the area of operation is more than one
village and therefore the orders passed by the Collector for the
delimitation of the constituency/constituencies cannot be said to be
illegal. Further, we hold that there will be no proper representation of
the voters to their respective specified societies for electing
representatives of their area which would materially affect the result of
the election and the impugned provisions and Rules are legally justifiable.
For the reasons stated supra, no relief can be granted in favour of
the appellant-societies by setting aside the election notification and the
prayer for setting aside the impugned judgement and orders. Hence, they
deserve to be dismissed. The respondents are directed to hold the election
to the specified societies as per sub rule (8) and (9) of Rule 3-A of the
Rules as are applicable to them under the Gujarat Co-operative Societies
Act after the delimitation of the constituency/constituencies of such
societies are made by the Collector as stated under sub-rule (9) of Rule 3-
A of the Rules.
23. For the reasons stated supra, we do not find any reasons whatsoever
to interfere with the impugned judgment and orders of the High Court. It is
needless to make observation that the State government and its officers
could not give effect to the provisions of the Co-operative Societies Act
and Rules for some time on account of which some of the societies have
challenged the impugned provisions and Rules before the High Court, even
after litigation was concluded by the Division Bench at one stage, the
State and its officers have not implemented the impugned provisions and
Rules without any valid reasons. The members of the specified societies in
the State have a right to elect their true representatives to represent
them as Managing Committee or Board members of the District Co-operative
Societies and other allied societies after de-limitation of the
constituency/ constituencies and therefore, we direct them to see that the
impugned provisions and Rules must be implemented forthwith without further
delay and submit compliance report within 8 weeks from the date of report
of the copy of this order.
24. The appeals are dismissed. No Costs.
.....................................................................J.
[V. GOPALA GOWDA]
.....................................................................J.
[ADARSH KUMAR GOEL]
New Delhi,
November 19, 2014
ITEM NO.1A-For Judgment COURT NO.11 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
C.A.NO............/2014 ARISING FROM SLP(C) No(s). 26017/2013
RAJKOT DISTT COOPERATIVE BANK LTD Petitioner(s)
VERSUS
STATE OF GUJARAT AND ORS Respondent(s)
WITH
C.A.NO............/2014 ARISING FROM SLP(C) No. 13201-13202/2012
C.A.NO............/2014 ARISING FROM SLP(C) No. 12219-12222/2012
C.A.NO............/2014 ARISING FROM SLP(C) No. 29726/2013
C.A.NO............/2014 ARISING FROM SLP(C) No. 27573/2013
C.A.NO............/2014 ARISING FROM SLP(C) No. 29727/2013
C.A.NO............/2014 ARISING FROM SLP(C) No. 29728/2013
Date : 19/11/2014 These appeals was called on for JUDGMENT today.
For Petitioner(s)
Mr. Mohit D. Ram,Adv.
M/s. Khaitan & Co.
Mr. Devendra Singh,Adv.
Mr. Aniruddha P. Mayee,Adv.
Mr. Subramonium Prasad,Adv.
For Respondent(s) Ms. Hemantika Wahi,Adv.
Ms. Pratibha Jain,Adv.
Mr. A. Venayagam Balan,Adv.
Mr. Vikash Singh,Adv.
Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment of
the Bench comprising His Lordship and Hon'ble Mr. Justice Adarsh Kumar
Goel.
Leave granted.
The appeals are dismissed in terms of the signed judgment.
(VINOD KUMAR) (MALA KUMARI SHARMA)
COURT MASTER COURT MASTER
(Signed Reportable judgment is placed on the file)
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[1] (1984) 2 GLR 1244
[2] (2004)1 GLR 310
[3] (2010) 3 GLR 2154
[4] (2012)1 GLH 245
[5] (2012) 2 GLR 1522
[6] (1972) 1 SCC 719
[7] (1973) 4 SCC 225
[8] (2006)7 SCC 1
[9] (2006) 2 SCC 1
[10] (1978) 1 SCC 405
