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SCA/17210/2005 20/ 20 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 17210 of 2005
For
Approval and Signature:
HONOURABLE
MR.JUSTICE K.M.MEHTA
==========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ? -
Yes.
2
To be
referred to the Reporter or not ? - Yes.
3
Whether
their Lordships wish to see the fair copy of the judgment ? - No.
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ? - No.
5
Whether
it is to be circulated to the civil judge ? - No.
==========================================
CHANASMA
TALUKA SAHAKARI KHARID VECHAN SANGH LTD - Petitioner(s)
Versus
STATE
OF GUJARAT & 4 - Respondent(s)
==========================================
Appearance
:
MR
HARIN P RAVAL for
Petitioner(s) : 1,
GOVERNMENT PLEADER for Respondent(s) : 1,
None
for Respondent(s) : 2 - 4.
MR BS PATEL for Respondent(s) : 5,
MRS
RANJAN B PATEL for Respondent(s) :
5,
==================================================================
CORAM
:
HONOURABLE
MR.JUSTICE K.M.MEHTA
Date
: 22/08/2005
ORAL
JUDGMENT
Rule.
Learned AGP waives rule on behalf of Respondent nos. 1 to 4.
Mr.B.S.Patel, learned Advocate waives Rule on behalf of Respondent
no.5.
Chanasma
Taluka Sahakari Kharid Vechan Sangh Ltd., petitioner has filed this
petition under Article 226 and 227 of the Constitution of India for
writ of certiorari and/or any other appropriate writ,
order or direction in the nature of certiorari, quashing and setting
aside the impugned order dated 16/6/2005, passed by the Additional
Registrar (Appeals), Cooperative Societies, State of Gujarat in
Appeal/Application No.60 of 2005.
Heard
Mr.Harin Raval, learned advocate for the petitioner and
Mr.B.S.Patel, learned advocate on behalf of respondent no.5 and
Mr.M.A.Patel, learned AGP for respondent nos.1 to 4.
The
facts giving rise are as under:
3.1
The petitioner is a registered cooperative society duly registered
under the provisions of the Gujarat Cooperative Societies Act, 1961.
3.2
It is the case of the petitioner that petitioner society incurred
loss during the years 1999-2000 and 2000-2001. Therefore,
petitioner society was ordered to be taken in liquidation under
Section 107 of the Cooperative Societies
Act which provides winding up of the cooperative society.
3.3
After some time passed, position of the
petitioner society improved and therefore, petitioner society has
made an application on 31/3/2005 for reconstruction of the
petitioner society, to the District Registrar, Cooperative
Societies. The Cooperation Officer (Liquidation) of the office
of the District Registrar issued an agenda on 21/4/2005 for the
purpose of holding a special general meeting. Thereafter, on
30/4/2005, meeting of the petitioner
society has held wherein it was decided to reconstruct the
petitioner society.
3.4
The District Registrar issued a notice on
3/5/2005 calling for suggestions and objections, if any against the
propose reconstruction of the petitioner society.
3.5
It is the case of the petitioner that pursuant to the said notice,
nobody objected to the revival of the society.
3.6
The District Registrar thereafter, after going through the proposal
of 3/5/2005 for revival of the society, the resolution of the
society dated 30/4/2004 and also Section 19 of the Act which
provides reconstruction of the society was pleased to pass an order
on 16/5/2005 about reconstruction of the society. The authority
observed that all members have trust in the new management of
society. The Government has also desire to open such society at
Taluka level and if the said society is opened, that will benefit
the agriculturists of Taluka and all members of the society
regarding carrying on business of fertilizers,
other medicines, pesticides in this behalf and even the past debt
can also be repaid in this behalf. All members have shown their
interest in opening of such a society. The order of reconstruction
passed is at page 62 of the paper book. Pursuant to that, the Deputy
Agriculture Director has issued a license
in favour of the society on 1/6/2005. The Deputy Agriculture
Director has also registered the society from 1/6/2005 to 31/5/2008
to carry on business in fertilizers and
pesticides. The said orders are produced by the petitioner in this
behalf. The Deputy Agriculture Director also passed further order
by registering the society for business in wholesale which is at
page 69. The meeting of the said society also held on 26/5/2005 and
the minutes of the said meeting has been
also put on record at page 71 of the petition.
It
appears that one Ganget Seva Sahakari Mandali Ltd., Mu.:Ganget,
Ta.:Chanasma, Patan, respondent no.5 in petition, filed an appeal
before Additional Registrar (Appeals) challenging the order of
reconstruction of the petitioner society dated 16/5/2005 passed by
the District Registrar, Cooperative Societies. The Additional
Registrar (Appeals) passed an order on 31/5/2005 issuing notice and
kept hearing on 8/6/2005. In the said application, respondent no.5
only joined District Registrar and did not join petitioner as a
party.
4.1
In the appeal proceeding, being Appeal No.60 of 2005, one
Mr.Pravinbhai M.Patel, the applicant/petitioner has filed
application on 8/6/2005 to join him as a party to the appeal and
also pass any other order in this behalf. Said Application is at
page 79 of the petition.
4.2
The Additional Registrar (Appeals), Gandhinagar was pleased to pass
order on 16/6/2005. In the said
proceeding, it was contended that against
the order of the Registrar dated 16/5/2005, the respondent no.5
filed appeal, when the order of the District Registrar has been
challenged by the respondent no.5, therefore, petitioner society is
a necessary and proper party in this behalf and they should be
joined as a party. The appellate authority passed an order that as
it is not deciding appeal but an interim
order, the application for joining petitioner as a party is not
necessary to be allowed at this stage and once again remanded the
matter to the District Registrar. The appellate authority also
cancelled the order dated 16/5/2005 granting registration to the
petitioner society (viz. without hearing the petitioner).
Mr.Harin
Raval, learned advocate for the petitioner stated that aforesaid
order of the Additional Registrar (Appeals) is nullity in eye of law
because they have already filed application for joining party. The
said application has not been decided on one hand and on the other
hand, it is ordered for cancellation of order of reconstruction. So
in eye of law, the authority has passed the order without hearing
the petitioner for reconstructing the society. The said order is
illegal, without jurisdiction and nullity in the eye of the law and
liable to be set aside as now it is well settled by a catena of the
decision of the Hon’ble Apex Court and the Hon’ble High Court that
if you want to pass any order, then pass the order after hearing the
parties. The basic principle of Rules of Natural Justice has been
ignored by the Additional Registrar (Appeals) and thereafter he
remanded the order.
It
may be noted that a Revision Application has also been filed by the
petitioner society somewhere in June, 2005. The Revisional
Authority, Joint Secretary, Agriculture and Cooperative Department
rejected the said application of the petitioner. It is observed
therein that when the Additional Registrar has passed an order, he
has passed the order after going through the records and District
Registrar has to pass the order after going through the merits of
the matter. As it is interim order, there is no question of
granting any injunction order in this behalf. The Revisional
Authority also did not address upon the basic question as to when
the petitioner’s application has not been considered and still the
authority has set aside the order, so the question is whether order
of the authority is following rules of natural justice or not and
whether the authority passed order without hearing the other side
has not been at all considered by the Revisional Authority. The
authority has passed a cryptic order
without application of mind and therefore, Mr.Raval, learned
advocate states that that order also must be quashed and set aside.
Mr.B.S.Patel,
learned advocate for the respondent has tried to support the order
and submitted that this Court may not interfere with the said order
in exercise of power under Article 226 and 227 of the Constitution
of India.
Mr.B.S.Patel,
learned advocate for the respondent also relied upon the affidavit
in reply of respondent no.5 dated
12/8/2005. It was only stated that the competent authority can
refuse the stay, but for that reasons are required to be assigned
and in the present case, impugned order, reasons have already been
assigned and therefore petition is not entertained in this behalf.
As regards order passed by the Additional Registrar (Appeals),
Cooperative Society, it has been stated that after hearing all the
parties concerned including the petitioner, it was the order of
remand and cannot be said to be a judicial order which cannot be
taken into revision and the said order cannot be a subject matter of
challenge as per the law settled by the Hon’ble Court in the case
reported in 1997 (2) GCD 314 (Nadiad Taluka Kharid Vechan Sangh
Limited vs. State of Gujarat and others) and therefore this Court
may not interfere at this stage.
Admittedly as the petitioner society has not started functioning and
therefore, the authority could not pass an order of review. Further
the authority has not been stated as to
whether the petitioner was heard or not
before the order of the cancellation of the registration or not.
This
Court is very sorry to observe that the authority being quasi
judicial authority to whom power has been vested ignores the basic
principles of law viz. Rules of Natural Justice and decisions
rendered by the Hon’ble Supreme Court and the Hon’ble High Court.
The authorities ought not to have passed order without joining them
as a party and without hearing the party. A basic principles and
rules of natural justice has been violated.
Mr.Raval,
learned advocate has relied upon several judgments in this
behalf to show that if principle of natural justice are violated,
the order become nullity and do not
existing in the eye of law.
I
have considered the facts and circumstances from the facts, which I
have stated above. Initially respondent no.5 has filed application
for quashing and setting aside the order of Society reconstructing.
He did not make petitioner as a party. When petitioner filed an
application for joining in the said proceedings, the Additional
Registrar (Appeals) did not decide application,
however, cancel the order dated 16/5/2005
granting registration to the petitioner obviously without hearing
the petition. If the revisional authority has confirmed the order
and remanded the matter without applying mind as to whether there is
a violation of rules of natural justice or not.
11.1
Now it is well settled that if rules of natural justice are
violated, the order become nullity in the eye of law. An order is
null and void if the statute clothing the
administrative tribunal with power conditions it with the obligation
to hear expressly or by implication.
(Read – Judgment of the Hon’ble Apex Court in the case of Nawabkhan
vs. the State of Gujarat, reported in AIR 1974 SC 1471, particularly
para 20 at page 1480.)
11.2
In a given case when the principle of natural justice are stated to
have been violated it is open to the Appellate Authority in
appropriate cases to set aside the order and require the assessing
officer to decide the case de novo. (Re. ? Judgment of the
Hon’ble Supreme Court in the case of Commissioner of Sales Tax and
others vs. Subhash & Co., reported in (2003) 3 SCC 454,
particularly para 22 (iv) at page 464).
11.3
?SConcept of natural justice has undergone a great deal of change
in recent years. Rules of natural justice are not rules embodied
always expressly in a statute or in rules framed thereunder. They
may be implied from the nature of the duty to be performed under a
statute. What particular rule of natural
justice should be implied and what its context should be in a given
case must depend to a great extent on the fact and circumstances of
that case, the framework of the statute under which the enquiry
is held.?? Re – Judgment of the Hon’ble Supreme Court in the case
of Canara Bank vs. Debasis Das, reported in AIR 2003 2041,
particularly para 19.
11.4
?SWhenever an order is struck down as invalid being in violation of
principles of natural justice, there is no final decision of the
case and fresh proceedings are left upon. All that is done is to
vacate the order assailed by virtue of its inherent defect, but the
proceedings are not terminated.?? – Re – Judgment of the Hon’ble
Supreme Court in the case of Canara Bank vs. Debasis Das, reported
in AIR 2003 2041, particularly para 21.
11.5
I have considered the Judgment of the High Court in the case of
Kanubhai C. Patel vs. Anandiben Patel, reported in 2004 (3) GLH 113,
where this Court has considered various principle of natural justice
from various authorities. Please see paras 6.1(a), 6.1(b), 6.1(c),
6.2, 6.3, 6.4, 6.5, 6.7, 6.8, 6.9, 6.10.
It
may be noted that Prof.C.K.Thakkar, now the Judge of the Hon’ble
Supreme Court of India in his book ?SLaw of Writs??, 5th
Edition, page 271, observed that ?SSo far as India is concerned, it
is fairy well settled and courts have consistently taken the view
that whenever there is violation of any rule of natural justice, the
order is null and void.?? and on page 272 also, observed that ?SOne
thing, however, must be noted. Even if the order passed by an
authority or officer is ultra vires, against the principles of
natural justice and therefore, null and void,
it remains operative unless and until it is declared to be so by a
competent court. Consequent upon such declaration, it automatically
collapses and it need not be quashed and
set aside.??
It
may be noted that Dr.I.P.Missy, in his book ?SAdministrative Law ??,
6th Edition, page 182, observed that ?SThe principle of
audi alteram partem is the basic concept of the principle of natural
justice. The omnipotency inherent in the doctrine is that no one
should be condemned unheard. In the field of administrative action,
this principle has been applied to ensure fair play and justice to
affected persons.??
It
may be noted that Dr.S.P.Sathe, in his book ?SAdministrative Law ??,
7th Edition, page 248, observed that ?SAn administrative
action, which is taken in violation of the rules of natural justice,
such as fair hearing, is an action without jurisdiction. It is an
ultra vires act and therefore, has to be nullity. The rules of
natural justice are open-textured, and they are bound to acquire new
dimensions as well as new meanings as vistas of the due process of
law and human rights widen.??
I
have also considered Hon’ble Supreme Court judgment in the case of
Ravi S.Naik vs. Union of India and others, reported in 1994 Supp.(2)
SCC 641, particularly para 20 at page 653, ?SPrinciples of natural
justice have an important place in modern Administrative Law. They
have been defined to mean ?Sfair play in action??. (See:Maneeka
Gandhi v. Union of India, Bhagwati, J.) As laid down by this Court:
?SThey constitute the basic elements of a fair hearing, having
their roots in the innate sense of man for fair play and justice
which is not the preserve of any particular race or contrary
but is shared in common by all men?? (Union of India v. Tulsiram
Patel). An order of an authority exercising judicial or
quasi-judicial functions passed in violation of the principles of
natural justice is procedurally ultra vires and, therefore, suffers
from a jurisdictional error??.
I
have considered the facts and circumstances
of the case. In this case, admittedly the District Registrar has
passed an order on 16/5/2005 about the reconstruction of the
authority and society started functioning in this behalf. The said
action of reconstruction was challenged by one Ganget Seva Sahakari
Mandali Ltd., respondent no.5 herein by filing appeal before the
District Registrar (Appeals). In the said proceedings, an
Additional Registrar (Appeals) issued notice. However, it may be
noted that the said appeal filed by respondent no.5, only District
Registrar was joined as a respondent and petitioner society was not
joined as a party. When the applicant/petitioner filed an
application on 8/6/2005 to join him as a party in appeal and also
passed an order in this behalf, the Additional Registrar (Appeals)
did not decide the application of the petitioner to join as a party,
remanded the matter to the District Registrar and cancell the order
dated 16/5/2005, granting the registration to the petitioner
society. Thus, the obvious fact is that the authority cancell the
order or registration of petitioner society without hearing in this
behalf because the authority did not decide the application for
joining him as a party so the proceedings by the appellate authority
by which it cancell the registration, the society was admittedly not
heard. Authority has rejected the Revision Application without
assigning any reasons. Revisional
Authority stated that the District Registrar has to hear the matter
and pass the order and therefore, after going through the same,
remanded the matter to the District Registrar. The District
Registrar also did not address as far as the question as to whether
the petitioner should be a party before the proceedings or not.
Therefore, question that whether the petitioner should be necessary
party before the order is quashed, has not been considered by the
revisional authority.
I
have gone through the contentions of both the learned advocates for
the petitioner and respondent in this behalf. Mr.Patel’s contention
that authority has only rejected the stay and only remanded the
matter, this Court may not interfere under Articles 226 and 227 of
the Constitution of India. However, unfortunately, in this case
initially when the respondent no.5 has filed an application
challenging the order of District Registrar, the authority has
passed interim relief on 31/5/2005 staying the order but authority
did not address itself as to whether the petitioner society is party
before it or not. It was their duty to point out parties and make
society as a party before passing any adverse order against the
petitioner society.
17.1
In my view, the District Registrar failed and neglect in his duty
before passing ex parte interim order as he passed the order without
joining the petitioner as a party respondent and without hearing
him. Still worst when the application filed for joining party,
3.1/2 pages order has been passed without deciding that application
of the petitioner for impleading it to be joined as party
respondent, straight way allowed the appeal of the private
respondent no.5 and set aside the order of the reconstruction of the
petitioner dated 16/5/2005 passed by the District Registrar,
Cooperative Societies.
It
is settled law that ?SAudi alteram paterm The Audi alteram partem
rule ensures that no one is condemned unheard. It is the first
principle of civilized jurisprudence that
a person against whom any action is sought to be taken or whose
right or interest is being affected, be given a reasonable
opportunity to defend himself. Hearing means a fair hearing. This
involves components, such as: (1) Notice; (2) an opportunity to the
concerned party to present his case; and (3) legal representation.
Re ? Halsbury’s Laws of India, para 005.054 at page 119-120. It
is also settled that a quasi judicial order made without following
natural justice is void and null. The non observation of natural
justice is itself a prejudiced to any
individual and proof of prejudice, independent of proof of denial of
natural justice, is not necessary. In cases of absence of notice
or absence of hearing, the order passed is invalid or a nullity. I
have also referred to the judgment in the case of Navi Bhagat vs.
the State of Bihar, reported in 1990 (2) SCC 48.
As
regards principles of natural justice is concerned, once the
authority passed an order without giving an opportunity of being
heard to the concerned person, then order is become nullity in eye
of law. In this behalf I have considered various judgments of the
Hon’ble Supreme Court 1) in the Case of Nawabkhan v. the State of
Gujarat, reported in AIR 1974 SC 1471, 2) in the case of
Commissioner of Sales Tax and others
v. Subhash & Co. reported in (2003) 3 SCC 454, and 3) in the
case of Canara Bank v. Debasis Das, reported in 2003 AIR 2041 and
also judgment of this Court in the case of Kanubhai v. Anandiben
Patel, reported in 2004 (3) GLH 113 and also various books namely
?SWrit of Law?? of Justice C.K.Thakkar and ?SAdministrative Law??
of Dr.S.P.Sathe and also another judgment of Hon’ble Supreme Court
in the case of Ravi S.Naik v. Union of India and others, reported in
1994 Supp.(2) SCC 641. In view of these the authorities, it is
crystal clear that when the authority pass
an order particularly when registration is already there and cancell
the same if the said order is passed without given an opportunity of
being heard, the order as if does not existing and therefore the
petition is allowed. In view of the same, the order dated 16/6/2005
passed by the Additional Registrar (Appeals) by which he has
cancelled the order of the District Registrar dated 16/5/2005 of
registering the petitioner society without hearing the petitioner is
quashed and set aside as well as the order passed by the Special
Secretary, Agriculture and Cooperative Department dated 5/8/2005
also quashed and set aside because the
authority has not considered the principle of natural justice in
this behalf. This Court hopes and trusts that in subsequent
proceedings, authority consider this principles before passing any
order and they will atleast give an
opportunity of being heard to the
concerned petitioner in this behalf. In view of the same, no order
as to costs.
Petition
is allowed with no order as to costs. Rule is made absolute to this
extent.
(K.M.MEHTA,
J.)
(ila)
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