Cav Judgment:1. RULE returnable forthwith. Mr. K.M. Antani, learned AGP waives service of notice of Rule on behalf of respondent State.2. By this petition under Article 226 of the Constitution of India, the prayer of the petitioner is to issue an appropriate writ, order or direction quashing and setting aside the impugned show-cause notice dated 20.06.2020 issued by the District Registrar. Pending the petition, pursuant to the show cause notice under challenge, the District Registrar issued an order dated 11.08.2020, by which, in exercise of powers under Section 81 of Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as 'the Act' for short), the petitioner - the Visnagar Taluka Cooperative Purchase and Sales Union Limited was superseded. In other words, the challenge in this petition is the order dated 11.08.2020 passed by the District Registrar superseding the Visnagar Taluka Cooperative Purchase and Sales Union Limited.3. Since the order of supersession was passed, learned Senior Advocate Mr. P.K. Jani on 23.08.2020 prayed for deletion of petitioner no.1 society from the cause title and therefore the petition as it stands today, is by five petitioners. The petitioner Shri Kanji Chaudhary was the Chairman of the superseded society.4. Heard Mr. Prakash Jani learned Senior Advocate with Mr.Shivang Jani learned advocate for the petitioners and Ms.Manisha Luvkumar, learned Government Pleader with Mr.K.M.Antani learned AGP with Ms. Aishvarya Gupta learned AGP for the State. On 07.09.2020, with the consent of the parties the petition was taken up for final hearing and the Court reserved the matter for judgment.5. The facts in brief are that the Visnagar Taluka Cooperative Purchase and Sales Union Limited ('the society' for short) is a society whose office bearers were elected in the year 2015. The term of the elected members was for a period of 5 years i.e. upto 14.08.2020. According to the society (now superseded) in the year 2015-16, 2016-17, 2017-18 and 2018-19, it received an audit Class - A. Pursuant to an application made by certain members of the cooperative society for carrying out re-audit, an exercise of re-audit was carried out by the respondents. The subject matter of re-audit was under challenge by the petitioners in Special Civil Application No. 7461 of 2020. On the basis of a re-audit report dated 16.06.2020, the District Registrar issued a show cause notice dated 20.06.2020 as to why the petitioner society should not be superseded due to the various defaults so extensively enumerated in the show cause notice dated 20.06.2020. Pursuant to the show cause notice, the order impugned dated 11.08.2020 was passed.6. Mr. P.K. Jani, learned Senior Advocate appearing for the petitioner society would contend as under:6.1 Inviting the Court to the prayers initially made in the petition, Mr. Jani would submit that what was under challenge was a show cause notice dated 20.06.2020 issued by the District Registrar asking the society to show cause as to why it should not be superseded.6.2 Mr. Jani would submit that petitions were filed before this Court viz. Special Civil Application No.7461 of 2020 for a prayer to quash and set aside the order dated 29.01.2020 passed under the provisions of Section 84(5) of the Act which was so confirmed vide an order dated 14.05.2020 by which, the report of readuit dated 19.06.2020 was confirmed. He would submit that subsequent Special Civil Application No.7321 of 2020 was filed with a prayer to quash and set aside an order dated 22.05.2020 passed under Section 83(1) of the Act. By the order impugned therein, the District Registrar had authorized the District Magistrate to take into possession the records of the petitioner. The Court pronounced the judgment on 05.08.2020. Special Civil Application No.7321 of 2020 was allowed and the Court found that the action of the respondents in exercising powers authorizing the District Magistrate to take possession of the record was highhanded and the cost was imposed of Rs.1 lakh. As far as Special Civil Application No.7461 of 2020 was concerned, the petition was dismissed. All throughout pending the petition and the proceedings before this Court, it was agreed by the counsel for the State that no action pursuant to show cause notice dated 20.06.2020 would be taken. The judgment was pronounced on 05.08.2020. Pursuant to the pronouncement of the judgment, a communication was issued by the respondents on 07.08.2020 fixing the hearing pursuant to the show cause notice on 11.08.2020 at 12:00 A.M. The communication was not served on all committee members. A specific request was made that the hearings be adjourned in view of the fact that the petitioners were still undertaking a study of the judgment dated 05.08.2020 and therefore, the impugned order dated 11.08.2020 was in violation of principles of natural justice.6.3 Mr. Jani would in support of his submission submit that on 11.08.2020 at 11:00 A.M., when the petitioner - Chairman approached the authorities seeking an adjournment, the proceedings were not adjourned. However, at 4:00 P.M. the order of supersession was passed on the very same day which shows the vindictiveness and the predetermined mind of the authorities and the mala-fide intention.6.4 Mr. Jani would further submit that the sequence of events would suggest that the show cause notice was issued for a hearing on 07.08.2020 and the society and its committee members were asked to furnish an explanation within four days. Out of the four days, two days were holidays being Saturday and Sunday. Request for time on 11.08.2020 was rejected. On the same day at 4:00 P.M. the order was passed. Immediately two days thereafter, an advertisement was given superseding the committee and taking over the charge.6.5 Mr. Jani would submit that a petition was already filed challenging the show cause notice dated 20.06.2020, on 08.08.2020 and before it would come up for first hearing on 20.08.2020, the order dated 11.08.2020 was passed.6.6 Mr.Jani placed reliance on the decision of the Supreme Court in the case of Tarlochan Dev Sharma v. State of Punjab and Haryana reported in 2001 (6) SCC 260 para 16 thereof to submit that the decision was taken in hot haste and the way the executive was dealing would show the scant manner of respect it had for a duly elected society knowing fully well that the term of the society was to end on 13.08.2020. Within a day the hearing was concluded and the society was superseded. He would reiterate the impeccable record of the society and contend that it is only at the wills of the political powers especially the MLA of the local constituency that the order of supersession has been passed. Extensive reliance has been placed before this Court in reading each and every defalcation so made in the show cause notice to submit that if these were the instances of defalcation which would warrant supersession of the society, then any society within the State of Gujarat would have to be superseded.6.7 Extensive reliance was placed on the decision of this Court dated 05.08.2020 to contend that while allowing Special Civil Application No.7321 of 2020, the exercise of police taking over the record was deprecated. Mr.Jani would submit that the action was highhanded, vindictive in nature. Reliance was placed on the provisions of sub- section (7) of Section 81 of the Act to submit that by virtue of these provisions, the members of the Committee would be disqualified for a period of six years from contesting the election. In effect, the members would stand to lose 10 years inasmuch even if the elections are now held; they will not be able to contest. The term of the new committee would be for a period of five years, on the sixth year commencing again an election would have been held which would enure for another five years and therefore in effect the order of supersession is a serious civil consequence.7. Ms. Manisha Luvkumar learned Government Pleader has drawn the attention of this Court to the affidavit-in-reply filed on behalf of one Hiteshkumar P. Patel, working as a District Registrar, Cooperative Societies. She would submit as under:7.1 The notice dated 20.06.2020 was addressed to 13 members of the Managing Committee. The only challenge is by the petitioner no.2 who was the erstwhile Chairman of the society. Rest of the members, 12 in number have not challenged the action. Of course to this Mr. Jani had submitted that he had the Vakalatnamas of the remaining 12 members and therefore this should be taken as a challenge on behalf of the other 12 members too.7.2 As far as the contention that the decision was taken in hot haste, she would submit that the show cause notice was dated 20.06.2020. Looking to the significance of the date of 13.08.2020 when the term of the Managing Committee was expiring, it was important that a decision pursuant to the show cause notice dated 20.06.2020 be taken before that date.7.3 Ms. Luvkumar would submit that in one way or the other, after the order dated 29.01.2020 of re-audit was passed, the petitioner indulged in litigation after litigations to subvert the process of law and even after the show cause notice was issued on 20.06.2020, petition which were filed against the re-audit and the police action of taking records was being heard without challenge to the show cause notice.7.4 Ms. Luvkumar would submit extensively relying on the findings of this Court and the prayer in context of the reaudit report dated 16.06.2020 that in effect the petition dismissing the revisional authority's order, had in fact affirmed the action of re-audit. The petitioner therefore was not a bona-fide litigant and therefore the petition be dismissed.7.5 Preliminary objection was also raised by Ms. Manisha Luvkumar Shah, learned Government Pleader as to the maintainability of the petition on the ground that an alternative remedy of an appeal under Section 153 of the Act was available. One of the members of the Managing Committee viz. Patel Tribhovanbhai Virchandbhai had already preferred an appeal before the Additional Registrar against the impugned order dated 11.08.2020.7.6 Ms. Luvkumar would further submit that the order dated 05.08.2020 by which the petition in context of seizing of the records was allowed by this Court, a Letters Patent Appeal has been filed and is pending. She would invite the attention to the chronology of the litigation undertaken by the petitioner wherein, initially the order of the applicant's pursuant to which the reaudit was carried out and who was joined as party in revision was a subject matter of challenge, which challenge failed right upto the Supreme Court. Then the petitions being Special Civil Application No.7321 of 2020 and 7461 of 2020 were filed by which, the action of re-audit was set aside by this Court and would submit that after the judgments were pronounced on 05.08.2020, pending the judgments, time and again the proceedings of show cause notice were adjourned to enable the Court to pronounce the decision.7.7 On the question of challenge of Shri Jani on violation of principles of natural justice, Ms.Luvkumar would submit that a communication dated 07.08.2020 was addressed to each member individual of the executive committee and the Managing Committee to remain present on 11.08.2020 at 11:00 A.M. The delivery of such communication was accepted readily by the accountant. The communication was sent to the e-mail ID of the office of the Society. On 10.08.2020, the Accountant returned all such communications addressed to the members of the committee except the one that was addressed to the Chairman of the Society and the Manager. Considering the urgency of the matter, a day prior to the scheduled hearing on 11.08.2020 the respondents served each member of the Committee through the medium of whats app and by individual telephonic call to each member. A positive averment to this effect has been made in paras 7.14 to 7.16 of the affidavit-in-reply which read as under:"7.14 On 07.08.2020, a communication was addressed individually to all members of the Executive/Managing Committee of the Society regarding the hearing of the show- cause notice dated 20.06.2020, issued under Section 81 of the Act and it was informed to all the members of the Managing Committee that the same would be held on 11.08.2020 at 11:00 am at the office of the deponent. It is pertinent to note that the same were delivered to the Office of the Society, on 07.08.2020 and at that time, the delivery of such communications was readily accepted by the Accountant present at the Office of the Society. A copy of such communication was also emailed by the office of the deponent on the Email ID of the Society, being firstname.lastname@example.orgA copy of such communication dated 07.08.2020 is annexed hereto and marked as Annexure-R8. A copy of the email sent to the Society by the office of the deponent is annexed hereto and marked as Annexure-R9.7.15 On 10.08.2018, the Accountant/Employee of the Society came to the office of the Respondent and returned all such communications addressed to the members of the Managing Committee, except the one which had been addressed to the Chairman of the Society. It should be noted that the Accountant of the Society stated that the said communications being addressed to the Manager and Chairman, he would not be in a position to deliver the same to each Member. To this end, a communication dated 10.08.2020 was also addressed by the Accountant of the Society to the office of the deponent and a copy of which, is annexed hereto and marked as Annexure-R10.NOTE: Considering the stand taken by the office bearer of the Society just a day prior to the scheduled hearing on the 11th of August, all efforts were made by the office of the Respondent to serve the Members of the Managing Committee, personally. On the very same day, i.e. 10.08.2020, the said communications were delivered to each member of the Executive/Managing Committee through the medium of Whats app and the delivery of the same was even followed-up by way of an individual telephonic call to each such member. Therefore, all efforts were made to ensure that the members of the Managing Committee of the Society were well aware of the hearing that was to take place on 11.08.2020 as regards, the notice issued under Section 81 of the Cooperative Societies Act, 1961. A communication dated 10.08.2020 was also sent to the members of the Managing Committee on whats app wherein the entire sequence of events pertaining to the service of the communication dated 07.08.2020, was explained. A copy of such communication dated 10.08.2020, is annexed hereto and marked as Annexure-R11.7.16 On 11.08.2020, only the Chairman and 2 members of the Committee (Kamleshbhai Patel and Ishwarbhai Jivabhai Patel) appeared before the Respondent and sought for time stating that the judgment in Special Civil Application Nos. 7321 of 2020 and 7461 of 2020 was pronounced on 05.08.2020 and they were in the process of going through the same. It was also stated by them that the notice dated 20.06.2020 had been challenged by preferring a writ Petition before this Hon'ble Court on 08.08.2020. However, the said matter had not yet been listed before the Hon'ble Court. This request was not acceded to by the deponent and hearing of the matter was fixed by the deponent at 4:00 pm on the same day. That the matter was being fixed for hearing on the same day was specifically informed to the Chairman and the 2 members of the Managing Committee who were present. However, they categorically refused to sign the Rojkam of the proceedings and none appeared on behalf of the Society at 4:00 pm. NOTE: Considering that Section 81 of the Act, requires the order to be passed within 15 days of issuing the notice and further considering that term of the Managing Committee was expiring on 13.08.2020, in the interest of justice and in order to prevent the frustration of the operation of law, the Respondent was pleased to pass a detailed order under Section 81 of the Act superseding the Managing Committee of the Society and further appointing one Mr. PK Chauhan (Cooperative Officer, Marketing, Office of the District Registrar, Mehsana) as the Administrator of the Society for a period of one year. It is noteworthy that the re-audit report pointed out grave irregularities and on the basis of the same the show-cause notice was issued and accordingly, despite affording several opportunities, the petitioner fail to address the issues raised therein, and an order superseding the Society was passed."7.8 The specific averment is made that on 11.08.2020, the Chairman and two members remained present but refused to sign the Rojkam. Considering the provisions of Section 81 which requires the order to be passed within 15 days and looking to the fact that the term was expiring on 13.08.2020, the order of 11.08.2020 was passed.7.9 Adverting to the merits of the case, Ms.Luvkumar invited the attention of this Court to the defalcations made out in the show cause notice and would submit that reading each one of them would indicate that once the challenge to the re-audit had already failed and the petition being Special Civil Application No.7461 of 2020 was dismissed, wherein, by a specific amendment, the challenge to the re-audit of report was made, it was no longer open for the petitioner now to cry foul challenging the action of supersession based on such re-audit report.7.10 Insofar as merits are concerned, she would invite the attention of this Court to para 10.3 listing the defalcations made out in the impugned order. It would be worthwhile to reproduce the translated version so extensively relied upon and now reproduced in the affidavit in reply which reads as under."10.3 Insofar as the merits of the case are concerned, whist maintain the stand of the respondent authorities that, the order impugned is an appealable order and infact, one of the Members of the Managing Committee(Patel Tribhovanbhai Virchandbhai) has already preferred an appeal, the grounds on which the order dated 11.08.2020 has been passed by the deponent are as hereunder:i. The members of the Executive/Managing Committee granted bonus for all four years, i.e. 2015-16 to 2018-19, to all employees of the Society without there being any provisions for the same in bye-laws of the Society. Moreover, not only was such payment against the bye-laws of the Society but the total payout made to the employees was more than the Bonus Fund actually created. This act of the members of the Executive/Managing Committee has led to financial loss being caused to the Society.ii. As per Section 67-A of the Cooperative Societies Act, 1961, every society which earns profit from its activities of credit and recovery shall maintain a Bad Deb Reserve Fund and every year, the society shall carry at least 15% of the net profit to the Bad Deb Reserve Fund. It is pertinent to note that no such Fund was created by the members of the Executive/Managing Committee of the Society. Section 67- A is reproduced for the ready reference of the Hon'ble Court:"67A. Bad Debt Reserve Fund.- (1) Every society which earns profit from its [activities of credit and recovery], shall maintain a Bad Debt Reserve Fund.(2) Every year, the society shall carry at least fifteen per cent of the net profit to the Bad Debt Reserve Fund.(3) All debts which are found to be irrecoverable and certified as such by a certified auditor and expenses incurred in recovering the same shall first be written off against the Bad Debt Reserve Fund.(4) Notwithstanding anything contained in section 67- (a) the balance of bad debts, if any, remaining after first writing them off under sub-section (3); and(b) all losses incurred by a society including those suffered on account of settlement of disputes under Section 98 which are certified as such by a certified auditor, may be written off against the reserve fund maintained under Section 67 to the extent of not more than thirty per cent. of the balance in that fund:Provided that no bad debt or loss shall be written off against the bad debt fund or, as the case may be, the reserve fund, unless the society in the general meeting passes a resolution approving the same by a majority of not less than two-third of the members of the society present and voting.(5) Notwithstanding anything contained in the Act, no society in cooperative credit structure shall be directed by the State Government or otherwise required to contribute to any fund other than those for improving the net worth and owned fund of the society".iii. As per the bye-laws of the Society, loans were granted to its members and employees. However, no recovery as regards interest on such loans was effected by the Board.iv. No action was taken by the Managing Committee against its Members who remained absent for 3 or more consecutive meetings, as mandated by Bye-law No. 32(b)(3). A copy of the Bye-laws of the Society is annexed hereto and marked as Annexure-R16.v. It is pertinent to note that the Society was entitled to recover a certain amount from the Food Corporation of India and one Mahendrabhai Chaturbhai. Only an amount of Rs. 44,000/- was recovered in the year 2016-17 and still an amount of Rs. 2,04,000/- is pending thereby leading to financial loss to the Society.vi. It is pertinent to note that there are 13 Members in the Managing Committee of the Society and the Society has 79 member societies. The bye-laws of the Society were amended in such a manner that only such member societies having a share capital of Rs. 10,000/- would be entitled to fill the nomination form to vote in the elections of the Managing Committee. Very interestingly, the Managing Committee ensured that such share capital is not given to all member societies but only to the 13 societies of which the Members of the Managing Committee were members. Moreover, no formal intimation regarding such amendment was made to each member of the Society and the same was not even approved in the General Meeting.vii. As per Section 24 of the Cooperative Societies Act, 1961, no society shall, without sufficient cause refuse admission to membership to any person duly qualified under the provisions of this Act, the rules and bye-laws of such society. Membership has been denied to one Maroda Seva Limited without disclosure of any reasons, in violation of Section 24 of the Cooperative Societies Act, 1961. Section 24 is reproduced for the ready reference of the Hon'ble Court:"24. Open Membership.-(1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefore under the provisions of this Act, the rules arid bye-laws of such society.(2) Where the society does not communicate any decision to a person within a period of three months from the date of receipt by the society of his application for admission, such person shall be deemed to have become the member of such society on the expiry of the aforesaid period of three months.(3) Where a person is refused admission as a member of a society, the decision together with the reasons therefore shall be communicated in writing to such person by the society within three months from the date of receipt by the society of the application for admission, made by such person.(4) Any society aggrieved by the admission of a member under sub-section (2) or any person aggrieved by the decision of the society refusing him its , membership under sub-section (3) may appeal to the Registrar.(5) An appeal under sub-section (4) shall be made within a period of two months from, the date of communication to him of the decision of the society, or, as case the may be, from the date of the expiry of the period of three months specified in sub-section (2).(6) The decision of the Registrar in appeal shall be final and shall not be called in question in any court.(7) Nothing in this section shall apply to a society belonging to a class notified under sub-section (2) of Section 22."viii. It is submitted that for the construction of new shops, the construction tender was allotted without following the proper tender process and without even disclosing the details of the other bidders, thereby causing financial loss.ix. It is most pertinent to note that the accounts of the regular transactions of the various member societies with the Society ha have not been maintained.x. Most shockingly, no internal audit of the accounts has been conducted in the past 4 years."7.11 Ms. Luvkumar would submit that it is well within the discretion of the State to initiate proceedings under Section 81 of the Act. As far as the contention of the decision having been taken in hot haste, she relied on the decision rendered on 05.08.2020 where this Court specifically observed that merely because a decision is taken in hot haste would not make the order vulnerable.8. Considering the submissions made by Shri Prakash Jani learned Senior Advocate and Ms.Manisha Luvkumar learned Government Pleader, a precursor to the impugned order dated 11.08.2020 has extensively been argued and discussed in the judgment of this Court in Special Civil Application No.7461 of 2020 and 7321 of 2020. Albeit, the action of taking over the records through the machinery of the police was quashed and set aside by this Court, the order of the revisional authority of 14.05.2020, upholding the order of re-audit under Section 83(5) of the Act was upheld. Perusal of the decision rendered would indicate that all these submissions were set out extensively by Mr.Jani while attacking the order of re-audit and the consequential reaudit report. Relevant portion of the order reads as under:"35. Having considered the submissions made by the learned counsels for the respective parties, let us for the sake of convenience and brevity appreciate the provision under consideration. Sec.84(5) of the Gujarat Cooperative Societies Act which provides for audit, inquiry and inspection reads as under:"84(5) If it appears to the Registrar, on an application by a society or otherwise, that it is necessary or expedient to re-audit any accounts of the society, the Registrar may by order provide for such re-audit and the provision of this Act applicable to audit of accounts of the society shall apply to such re-audit."What the section says is that the Registrar shall audit or cause to be audited by a person possessing prescribed for qualifications by a general or a special orders, accounts of every society. Sub Sec.(5) of Sec.84 of the Act provides that if it appears to the Registrar on an application or otherwise that it is necessary or expedient to get any account of the society re-audited the Registrar may by an order provide for such re-audit. Reading the provision of Sec.84(5), it unequivocally provides that even on an application of a 3rd party, it is open for the Registrar to carry out an audit of the Society when it finds that there are good and sufficient grounds.36. With regard to the contention of Mr.Jani that no application could have been entertained at the behest of the respondent Nos.6 to 13 who were strangers, that submission would not be very difficult to deal with in view of the decision dated 5.3.2020 of SCA No.5786/2020 rendered by this Court in the case The Visnagar Taluka Cooperative Purchase and Sales Union Limited v. State of Gujarat (Page 167 in SCA 7461/2020). There, this Court was called upon to consider whether the order of revisional authority joining the respondent Nos.6 to 13 was valid and whether they should have been joined as parties, that specific objection was taken by the learned advocate Mr.P.K. Jani and this Court while dealing with this submission in detail had set the same aside and held that the respondent Nos.6 to 13 were necessary and proper parties. The decisions relied on by Mr.Jani in the cases of S.S. Rana (supra) and Thalappalam (supra) have been also referred to by this court in the said decision. Relevant paras 9 to 12 of the decision dated 5.3.2020 of SCA No.5786/2020 are reproduced hereunder:"9. Having considered the respective submissions made by the parties on hand, a brief reiteration of the facts may be necessary:An application was made on 23.01.2020 by the respondent no.13 to the Joint Registrar. Reading of the application would indicate that the respondent no.13 was a member of Shri Rangpur Seva Sahakari Mandli Limited. Shri Rangpur Seva Sahakari Mandli Limited was the primary member of the petitioner society. The case of the applicants/respondents No.6 to 13 was that they were therefore indirectly involved in the interest in the better functioning of the petitioner society. It was in this background that they had made an application for re- audit.On 29.01.2020, on the request made by the respondent no.13, an order of re-audit was passed. This Court for the present, will not enter into the validity and legality of the order dated 29.01.2020 passed by the competent authority in entertaining the application and ordering reaudit. The issue whether the order dated 29.01.2020 is just and proper is at large before the authority before whom the Revision Application is pending. The limited issue before this Court today to decide is, whether the authority who has considered the respondent nos.6 to 13 as necessary and/or proper parties while adjudicating the issue on the legality of the order dated 29.01.2020.10. At the first blush Mr.Jani's submission would be attractive to suggest that since respondent nos.6 to 13 are not members of the society, they have no locus to file an application for being impleaded as party respondents in Revision Application No.20 of 2020. That in view of the decision of the Supreme Court in case of S.S. Rana (supra) and Thalappalam Ser. Co-op. Bank Ltd. (supra), since the rigors of the State and public authority do not apply to a cooperative society, the applicants being outsiders have no role to play. With respect, I would disagree with the submissions of Mr.Jani on the ground that when the provisions of Section 84(5) of the Cooperative Societies Act are read, assuming for the sake of argument that the respondent nos.6 to 13 are not members of the society, reading of their application indicates that they are members of Shri Rangpur Seva Sahakari Mandli Limited-a cooperative society which is a primary member society of the petitioners and therefore they have an indirect but a substantial interest in the functioning of the petitioner society. Perusal of sub- section (5) of section 84 of the Act makes it clear that the registrar on an application or otherwise, get the account of the society reaudited, that is no qualification as to the eligibility of a person who can make an application for audit in the facts of the present case. Admittedly, it may not be said that respondent nos.6 to 13 who made an application can be said to be rank outsiders so as to not merit participation in the proceedings i.e. in the revision proceedings being Revision Application No.20 of 2020. It is in this context, the decision rendered by the Division Bench of this Court in Letters Patent Appeal No.644 of 2016 needs to be considered. Though it was in the context of an application filed by a member in the facts of that case, while discussing the concept of what a necessary and a proper party is in the context of Section 84(5) of the Act, the Division Bench considered the decision of the Supreme Court in case of Mumbai International Airport Private Limited v. Regency Convention Center and Hotels Private Limited and others reported in (2010) 7 SCC 417. It will be in the fitness of things to reproduce paragraphs 9 to 11 of the decision of the Division Bench. The pragraphs 9 to 11 read as under:" Powers under section 84(5) of the Act, 1961 can be exercised by the authorities suomoto or on an application submitted by the party. In the present case, respondent authority has not exercised said power on its own but same has been exercised at the instance of the appellant. The appellant has already paid audit fees of Rs.52,000/. Thus, the appellant being member of respondent no.4 - society and at whose instance powers are exercised by respondent authorities and when specific allegations are leveled against the appellant by name, we are of the view that the appellant can be said to be necessary and proper party to the proceedings. In the case of Mumbai International Airport Private Limited v/s. Regency Convention Centre and Hotels Private Limited and Others reported in (2010) 7 SCC 417, the Hon'ble Apex Court has held in paragraph nos.15 and 25 as under :" "15. A 'necessary party' is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a 'necessary party' is not impleaded, the suit itself is liable to be dismissed. A 'proper party' is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.""25. In other words, the court has the discretion either to allow or reject an application of a person claiming to be a proper party, depending upon the facts and circumstances and no person has a right to insist that he should be impleaded as a party, merely because he is a proper party." In the case of State of Asasm v/s . Union of India and Others reported in 2011 AIR SCW 3724, the Hon'ble Apex Court has observed in paragraph no.14 as under :"14. We respectfully agree with the observations made by this Court in Udit Narain's case (supra) and adopt the same. We may add that the law is now well settled that a necessary party is one without whom, no order can be made effectively and a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision of the question involved in the proceeding."12. Discussing the concept of a 'necessary party' and a 'proper party', what is needed to be appreciated is that a proper party is a party though it may not be necessary party, but is one whose presence would enable the Court to completely, effectively and adequately adjudicate the dispute. This can be viewed in context of the averments made by the petitioner in the memo of the Revision Application. Though the order of re-audit dated 29.01.2020 is directly a subject matter of challenge in such revision, one of the root causes of such a challenge is the authority of the Registrar to pass such an order based on an application made by the respondent nos.6 to 13. It is a specific contention by the petitioner before the Revisional Authority about the locus of the applicants/respondent nos.6 to 14, I would agree with the submission of Shri Desai that this submission can best be answered by the applicants who have been joined as parties in the revision proceedings."37. Now coming to the submission of Mr.Jani that the order is in violation of principles of natural justice, in the submission of Mr.Jani when an application was made by the respondent Nos.6 to 13 and the date of was preponed from 11.2.2020 to 20.1.2020, no order could have been passed without giving an opportunity of hearing to the petitioner herein. That issue is no longer in doubt in view of the decision of the Bombay High Court in the case of Prabhadevi Himgiri Cooperative Housing Society Limited (Supra). In that judgment also, the issue was whether the Registrar ought to have heard the society while passing an order of re-audit. The relevant provisions under the Maharashtra Act was Sec.81 which was mutatis mutandis similar to the one under challenge here and the Court in para 7 observed as under:"7. I have considered rival circumstances and the submissions made and I do not find that any case for interference is made out at this stage. Under sub section 6 of Sec.81 of the Act, if it appears to the Registrar, on an application by society or otherwise, that it is necessary or expedient to re- audit the accounts of the society, the Registrar may by order direct such re-audit and if such re-audit is directed, the provisions of the Act applicable to the audit of the accounts of the society, apply to such re-audit. It can thus clearly be seen that the Registrar can act on the basis of the application of the society or otherwise which would include on the basis of any information received. The contention that the Registrar had no power to review cannot be accepted for the reason that an order merely directing re-audit would be of an administrative nature, and cannot be said to be of a quasi juridical nature. It is necessary to note that if the Registrar subsequently comes across certain material, which requires re-audit to be conducted, he can always direct such re-audit under sub Sec.6 of Sec.81 of the Act. Thus, the first contention raised on behalf of the petitioner, cannot be accepted."38. Even in a decision rendered by the Division Bench of this court in the case of Mehsana District Cooperative Milk Producers Union Limited (Supra) in LPA No.555/2018 dated 28.3.2018, para 17 thereof reads as under:"17. In the case of Chimanbhai Dadubhai Desai and another v. Chaturbhai P. Patel District Registrar Cooperative Societies (Supra), the Division Bench has held that an order directing an inquiry u/S.86 of the Act is a serious matter for a cooperative society and, therefore, the same may involve serious consequences, therefore, the Division Bench observed that the principles of natural justice are required to be complied with. However, in the present case, as discussed hereinabove, respondent No.2 has passed an order for carrying out audit u/S.84(5A) of the Act and, therefore, no opportunity of hearing is required to be given to the petitioner Union before passing such an order. Thus, the said decision would not be applicable in the facts of the present case."There the distinction was drawn between the provision of Sec.84(5) and that of 84(5)(A) of the Act. Sec.84(5)(A) of the Act provides that the Registrar shall by an order provide for a special audit of any society on its own or on the basis of a recommendation of the Reserve Bank of India or as the case may be, the national bank. Here the distinction was that it is not a re-audit as contemplated in sub sec.5 of Sec.84 of the Act and, therefore, even the Division Bench in that case held that even when serious repercussions by Special Auditor involved, no opportunity of hearing will be given before passing such order. If that is the case, obviously therefore re-audit is not an order which would require a personal hearing.39. The learned Advocate General has rightly relied on a decision of the Supreme Court in the case of M/s.Avon Services Production Agencies (P) Ltd. (Supra) where while appreciating the provisions of Sec.10 of the Industrial Disputes Act, the Supreme Court in para 6 has held as under:"6. Section 10(1) of the Act confers power on the appropriate Government to refer at any time any industrial dispute which exists or is apprehended to the authorities mentioned in the section for adjudication. The opinion which the appropriate Government is required to form before referring the dispute to the appropriate authority is about the existence of a dispute or even if the dispute has not arisen, it is apprehended as imminent and requires resolution in the interest of industrial peace and harmony. Section 10(1) confers a discretionary power and this discretionary power can be exercised on being satisfied that an industrial dispute exists or is apprehended. There must be some material before the Government on the basis of which it forms an opinion that an industrial dispute exists or is apprehended. The power conferred on the appropriate Government is an administrative power and the action of the Government in making the reference is an administrative act. The formation of an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character. Thus the jurisdictional facts on which the appropriate Government may act are the formation of an opinion that an industrial dispute exists or is apprehended which undoubtedly is a subjective one, the next step of making reference is an administrative act. The adequacy or sufficiency of the material on which the opinion was formed is beyond the pale of judicial scrutiny. If the action of the Government in making the reference is impugned by a party it would be open to such a party to show that what was referred was not an industrial dispute and that the Tribunal had no jurisdiction to make the Award but if the dispute was an industrial dispute, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before Government on which it could have come to an affirmative conclusion on those matters (see State of Madras v. C. P. Sarathy) ."What the Supreme Court in the above decision has held is that the order under Sec.10(1) is merely an administrative order and, therefore since there is no quasi judicial or judicial function involved, there is no right to hearing.40. Akin to these provisions, what can be seen from Sec.84(5) of the Act that the contention of Mr.Jani that an opportunity of hearing be given is a submission which is misconceived and, therefore, deserves to be rejected. That also answers the second limb of Mr.Jani's argument that the order impugned herein i.e. the order dated 29.1.2020 so confirmed in revision by order dated 14.5.2020 is not a reasoned order. As stated above, since the order is an administrative order it need not be accompanied by reasons. However, having taken me through the audit reports, the learned Advocate General has aptly demonstrated that the application made by the respondent Nos.6 to 13 setting out 13 allegations, out of which 5 were found to be warranting re-audit suggests that the authorities in passing an order of re-audit cannot be faulted with.41. With regard to the submission that the authority should have resorted to follow the provisions of Sec.85 rather than follow Sec.81 is a submission which must be brushed aside only on the ground that the discretion to pass orders and invoke sections is with the authorities concerned. When there are alternative approaches to arrive at a problem and when the authority has an option to act in either of the two situations, merely because provisions of Sec.81 have been resorted to in preference to Sec.85, the order on this ground alone cannot be faulted.42. With regard to the objection to the appointment of respondent No.4 as a Special Auditor and that the visit and the order of seizing accounts was without authority of law, based on the notification dated 21.5.2020 and looking to the explanation rendered by the respondents in the affidavit in reply suggesting that the notification could not be brought in earlier because of the lockdown and it was only after a partial uplift of the lockdown that the notification was brought in force, supports the submission of the learned Advocate General that the notification dated 21.5.2020 has to be seen as an exercise in ratification of his appointment and, therefore it cannot be seen to be one that is bad in law and make the entire exercise of re-audit as bad.43. This in all answers the submissions made by the learned counsels for the respective parties summarizing my conclusion, it is held that, it cannot be said that;(a) the order dated 29.1.2020 read with the order of the revisional authority dated 14.5.2020 are orders which are bad in law on the account of being unreasoned and/or in violation of principles of natural justice because such orders are passed in the exercise of the administrative functions of the authorities. It is not a quasi judicial exercise of the powers therefore, neither an opportunity of hearing ought to have been given nor reasons in detail be set out.(b) the authorities have thought it to fit exercise the powers u/s. 81 rather than exercise the same u/s. 85 is also a matter of discretion vested with the authorities concerned and I do not find fault with them.(c) With regard to the consistent earning of audit class A and, therefore, the order be unwarranted u/s. 84(5) of the Act, what has been done by the authorities is a re-audit of accounts on an application which the authorities found justified. Audit Class `C' has been awarded to the petitioner. It may not amount to serious civil consequence downgrading the petitioner as canvassed by the learned advocate for the petitioner because the right to vote as provided u/s. 27(C) still vests with the petitioner and, therefore, it cannot be said to be an order bad in law.(d) On the question of the appointment of Shri K.D. Turi as a Special Auditor and his powers, I have answered the question in favour of the Government in view of the notification dated 21.5.2020 and held that the appointment was ratified and, therefore the respondent No.5 was duly authorized to carry out the special audit.(e) On the question of hot haste, from the material on record, what is evident is that though the re-audit was on an aspect of four years, merely because the decision was taken in hot haste would not by itself make the decision vulnerable. This issue has been dealt by this Court earlier in SCA No. 20711/2019 in the case of Dashrathbhai Jethabhai Patel (Supra) while considering the decision of Supreme Court and the submission of Mr.Jani then of the decision making process in hot haste. While relying on a decision of the Supreme Court in the case of K. Nagraj and others v. State of Andhra Pradesh reported 1985(1) SCC 523), this Court held as under:"22. As held in the case of N. Nagaraj (supra), merely because decision is taken on haste would not make it bad. So also held by the Supreme Court in the case of S.P.Gururaja (supra). Relevant para 13 of the said judgment i.e. N.Nagaraj and paras 34 & 35 in S.P. Gururaja, respectively read as under:"13. As regards Shri Venugopal's argument at (b) above, the fact that the decision to reduce the age of retirement from 58 to 55 was taken by the State Government within one month of the assumption of office by it, cannot justify the conclusion that the decision is arbitrary because it is unscientific in the sense that it is not backed by due investigation or by compilation of relevant data on the subject. Were this so, every decision taken by a new Government soon after assumption of office shall have to be regarded as arbitrary. The reasonableness of a decision, in any jurisidiction, does not depend upon the time which it takes. A delayed decision of the executive can also be bad as offending against the provisions of the Constitution and it can be no defence to the charge of unconstitutionality that the decision was taken after the lapse of a long time. Conversely, decisions which are taken promptly cannot be assumed to be bad because they are taken promptly. Every decision has to be examined on its own merits in order to determined whether it is arbitrary or unreasonable. Besides, we have to consider the validity of a law regulating the age of retirement. It is untenable to contend that a law is bad because it is passed immediately on the assumption of office by a new Government. It must also be borne in mind that the question as to what should be the proper age of retirement is not a novel or unprecedented question which the State Legislature had to consider. There is a wealth of material on that subject and many a Pay Commission has dealt with it comprehensively. The State Government had the relevant facts as also the reports of the various Central and State Pay Commissions before it, on the basis of which it had to take a reasonable decision. The aid and assistance of a well-trained bureaucracy which, notoriously, plays an important part not only in the implementation of policies but in their making, was also available to the Government. Therefore, the speed with which the decision was taken cannot, without more, invalidate it on the ground of arbitrariness.""34. Undue haste also is a matter which by itself would not have been a ground for exercise of the power of judicial review unless it is held to be mala fide. What is necessary in such matters is not the time taken for allotment but the manner in which the action had been taken. The Court, it is trite, is not concerned with the merit of the decision but the decision-making process. In the absence of any finding that any legal malice was committed, the impugned allotment of land could not have been interfered with. What was only necessary to be seen was as to whether there had been fair play in action.35. The question as to whether any undue haste has been shown in taking an administrative decision is essentially a question of fact. The State had developed a policy of single-window system with a view to get rid of red tapism generally prevailing in the bureaucracy. A decision which has been taken after due deliberations and upon due application of mind cannot be held to be suffering from malice in
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law on the ground that there had been undue haste on the part of the State and the Board."9. Para 43 of the judgment would indicate that the Court had specifically held in sub-clause (b) of para 43 that if the authorities have thought it fit to exercise powers under Section 81 rather than exercise the same under Section 85, it is a matter of discretion vested with the authorities and the Court did not find fault with it.10. As far as the contention of Mr.Jani that the show cause notice and the consequential order dated 11.08.2020 have been passed in violation of principles of natural justice, perusal of the affidavit in reply especially reproduction of para 7.13 to 7.15 hereinabove, indicate that the notice was served on the members of the Committee. The accountant at first stage accepted the notice, however, subsequently, returned the notices except that of the Manager and the Chairman. Each individual member of the Committee was served through whats app and by telephone as is evident from the affidavit in reply, para 7.15 thereof. The conduct of the petitioner no.2 in refusing to sign the Rojkam together with the Members of the Managing Committee would indicate that it is now not open for them to cry wolf holding that there is violation of principles of natural justice. This has to be viewed in context of the fact that the term of the Managing Committee was expiring on 14.08.2020.11. The timeline of the litigations would indicate that on an application made for re-audit in January 2020 at the behest of the private persons - the applicants of Civil Application No.1 of 2020, a reaudit was carried out. During the proceedings in revision, when these private persons were joined as parties, was a subject matter of litigation before this Court. The order of joining them as parties was confirmed. The order was challenged in Letters Patent Appeal and right upto the Supreme Court it was confirmed.12. Till such time the society was challenging the order of the "joining party issue", time was lost and it was only in May, 2020 that the authorities could proceed further to hear the revision which challenged the order of re-audit of January 2020. Not finding fault with the right of the litigant to persuade and pursue legal remedies, what the facts indicate is that once the order of confirming the order of reaudit was passed by the initial authority in January 2020, till May 2020 time was lost in pending litigations. The order of reaudit was a subject matter of challenge by way of an amendment to the petition which challenged the order of the Revisional Authority.13. The relevant paragraphs of the decision of 05.08.2020 reproduced hereinabove would indicate that once the Court affirmed the action of reaudit, confirming the order of revision and not granting the prayer of quashing the audit report, it was open for the authorities to take consequential action which they had so initiated by issuing a show-cause notice dated 20.06.2020. Mindful of the fact that the show cause notice was issued pending these petitions, the petitioner did not think it fit at that stage to assail the notice.14. Once having found that the decision of re-audit and the consequential revisional order being confirmed was against the petitioner, it sprung into action by challenging the show cause notice dated 20.06.2020. This was by filing a petition on 08.08.2020. Keeping the time line in view, once again knowing fully well that the term of the Committee was expiring on 14.08.2020, the authorities were left with no option but to hasten their steps to take consequential decision on the show cause notice dated 20.06.2020.15. The conduct of the petitioner no.2 now the sole petitioner would indicate that he refused to participate in hearing. Such a petitioner cannot be expected to come to this Court and then create a plea of violation of principles of natural justice. This submission that the order of 11.08.2020 violates the principles of natural justice is therefore rejected.16. Extensively on merits, as is so reproduced from the affidavit in reply would indicate that Section 81 has been invoked by the respondents vis--vis the petitioner. Submissions have been made on both sides to contend that the action did not warrant Section 81 steps, so contended by Mr.Jani whereas Ms.Manisha Luvkumar would contend otherwise.17. What is evident is that one of the Committee Members approached the Appellate Authority. Albeit the appellant has expired pending the appeal and the consequence of the appeal would take the course of law that it will. However, perusal of Section 153 considered in the context of the conduct of the other 12 committee members not approaching this Court, together would persuade this Court to dismiss this petition only on the ground of an alternative remedy available under Section 153 of the Gujarat Cooperative Societies Act.18. Therefore without taking into consideration the merits of the discretion exercised by the authority on facts as to whether the defalcations merited supersession of the Committee at all, and whether the decision was taken in hot haste or was politically vindictive or mala- fide, in view of the remedy of an appeal available under Section 153 of the Gujarat Cooperative Societies Act, I dismiss the petition only on that ground.19. In view of the above, the petition is dismissed with no order as to costs. Rule is discharged.20. In view of the disposal of the main petition, connected civil applications will also not survive and hence the same are also disposed of.