Dismissed

Mohanbhai Dahyabhai Patel v. State of Gujarat

Gujarat HC25 Jul 2022SCA/1888/2019

Case brief

AI extract

What is this about?

Writ petition challenging the State Government's order superseding the Vadhwan Agriculture Produce Market Committee and appointing an administrator. The petitioners alleged breach of natural justice as documents were not supplied and an adjournment was refused. The High Court found no prejudice and no procedural violation, held the order reasoned and based on material, and dismissed the petition.

What did the court decide?

Civil application for joining party allowed; writ petition dismissed with no order as to costs.

Mohanbhai Dahyabhai Patel Vs State of Gujarat — Cooperative Societies | Gujarat HC (2022)

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C/SCA/1888/2019 ORDER DATED: 25/07/2022

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/SPECIAL CIVIL APPLICATION NO. 1888 of 2019 With CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2019 In R/SPECIAL CIVIL APPLICATION NO. 1888 of 2019

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MOHANBHAI DAHYABHAI PATEL

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Versus STATE OF GUJARAT

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Appearance:

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MR BM MANGUKIYA(437) for the Petitioner(s) No. 1,2,3,4,5,6,7,8,9 MS BELA A PRAJAPATI(1946) for the Petitioner(s) No. 1 MR BHARGAV PANDYA, AGP for the Respondent(s) No. 1 RULE SERVED for the Respondent(s) No. 2,3,4 MR VC VAGHELA for the newly joined Respondents

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CORAM: HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

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Date : 25/07/2022

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ORAL ORDER

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The applicants have filed civil application No.1 of 1999

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for joining as party respondents in the Special Civil Application No.1888 of 2019.

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The civil application for joining as party respondent is allowed. The applicants are joined as respondents No.5 to 9 n

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the Special Civil Application No.1888 of 2019.

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By way of present writ-application the writ-applicants

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have prayed for the following reliefs :-

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“(A) Be pleased to issue a writ of mandamus or a writ in

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Page 1 of 52

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C/SCA/1888/2019 ORDER DATED: 25/07/2022

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the nature of mandamus or any other appropriate writ, order or direction and be pleased to quash and set aside the impugned order passed by the respondent no. 2 dated January 28, 2019.

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(B) Pending admission and final disposal of this application be pleased to stay the implementation, execution and operation of the impugned order passed by the respondent no. 2 dated January 28, 2019 and further be pleased to restrain the respondent their agents and servants from restraining the petitioners from acting and discharging their duties as the members of the Vadhwan APMC.

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The facts as stated by the writ-applicants germane to the adjudication of the present writ-application are thus :-

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3.1 The writ-applicants being aggrieved by the impugned order 28.1.2019 passed by the respondent No.2 under Section 43 of the Gujarat Agriculture Produce Market Act, 1963 (for short ‘APMC Act, 1963’) of superseding the Market Committee without conferring any opportunity of hearing and without providing any documents relied upon by the respondent No.2

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Page 2 of 52

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for issuing the show cause notice.

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3.2 It appears that the respondent No.1 issued show cause notice dated 15.1.2019 under Section 46 of the APMC Act, 1963, wherein it was stated that the reply was to be given within five days. Since the notice was received by the writapplicants on 17.1.2019, the Committee appointed the advocate and the advocate sought for the time before the competent authority seeking adjournment. The time came to be granted by the competent authority on 16.1.2019 for further hearing

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fixing the next date of hearing on 24.1.2019.

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3.3 It is submitted that on 24.1.2019 the writ-applicants again appeared through the advocate seeking adjournment and for procuring the documents which were relied upon while issuance of show cause notice. It appears that the nine writapplicants were represented through advocate and the respondents No.5 to 9 appeared in person before the competent authority. The competent authority declined to accede to the request of adjournment by the learned advocate appearing for

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the writ-applicants and proceeded with the hearing on 28.1.2019.

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Submissions on behalf of the writ-applicants :-

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Mr. B. M. Mangukiya, the learned advocate appearing for the writ-applicants submitted that the respondent No.2 by the impugned order dated 28.1.2019 passed an order superseding the writ-applicants exercising the powers under Section 46(1)

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of the APMC Act, 1963 and proceeded to appoint Dy. Registrar, Cooperative Society as an Administrator of the Committee.

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4.1 Mr. Mangukiya, the learned advocate submitted that the impugned order is passed without hearing the Committee and the same is in fragrant violation of the principles of natural justice.

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4.2 Mr. Mangukiya, the learned advocate submitted that though an application was preferred for seeking adjournment the competent authority declined to adjourn the matter, did

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not permit the advocate to appear and proceeded with the hearing.

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4.3 Mr. Mangukiya, the learned advocate submitted that a

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show cause notice was duly issued on 15.1.2019 was vague.

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4.4 Mr. Mangukiya, the learned advocate submitted that an application requesting the respondent No.2 to provide necessary documents relied upon by the respondent No.2 for issuance of show cause notice was sought for. However, the said documents were never supplied those not forming part of the show cause notice. Therefore, Mr. Mangukiya, the learned advocate submitted that the show cause notice was issued behind the back of the writ-applicants placing reliance on the material documents which were never supplied to the writapplicants. He submitted that on the said ground alone the impugned order dated 28.1.2019 is required to be quashed and set aside.

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4.4 Mr. Mangukiya, the learned advocate relied on following

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decisions :-

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2005 (4) GLR 3274

2009 (3) GLR 2167

(1992) 4 SCC 1

2021 (3) GLR 2339

Submissions on behalf of the respondent No.1 AGP :-

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Mr. Bhargav Pandya, the learned AGP appearing for the respondent No.1 – State placed reliance on the affidavit-inreply and submitted that the Deputy Director, Agriculture Produce & Rural Finance, and District Registrar, Co-operative Societies, Surendranagar on a personal visit of the Agriculture Market Committee, Vadhvan made an inquiry on the following points:

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(1) Without publishing any Advertisement of recruitment, of following any recruitment procedure filled the posts by appointed the relatives of the Directors.

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(2) Re-appointment of the retired employee.

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(3) Without publishing the agenda, the important issues were circulated by Chairman.

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(4) Repairing of 75 old shop-cum-godown of the Market committee.

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(5) Expenditure on establishment is above 40%.

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(6) Release of huge amount to the Project consultant.

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(7) Regarding use of the Innova Car of the Market Committee.

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(8) Allocation 33 stalls.

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(9) Regarding auction of cotton in the Market Committee.

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(10) No sanction of Assistant Secretary in the staff schedule thought the appointment given.

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(11) The work of installation of CCTV Camera and laying of

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drain line for rainy water allotted without any procedure and issuance of tender.

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(12) Without issuance of tender, allotted the Canteen.

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5.1 Mr. Pandya, the learned AGP submitted that the Office of the Director, Agricultural Produce & Rural Finance, by its communication dated 11.01.2019 sent a proposal to the State Government under section 46 (1) of the Gujarat Agricultural Produce Market Act, 1963, for supersession of marketing

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committed in the larger interest of the members of the Farmers of market area, and administrator to appoint the administrator. That pursuant, to the proposal received, a Show Cause Notice dated 15.01.2019 is issued to the Agricultural Produce Market Committee, Vadhvann.

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5.2 Mr. Pandya, the learned AGP submitted that the State Government has issued Show Cause Notice dated 15.01. 2019, further hearing is fixed on dated 24.01.2019, pursuant to proposal of the Director, Agricultural Produce & Rural Finance, dated 11.01.2019 to the State Government under section 46 (1) of the Gujarat Agricultural Produce Market Act, 1963, for supersession of marketing committed in the larger interest of the members of the Farmers of market area, and administrator to appoint the administrator. That on the next date of hearing of 24.01.2019, 4 members of the Agriculture Produce Market Committee remain present and placed their written reply and 2 members have represented themselves through written reply. The Advocate, has filed the Vakalatnama and made representation on dated 24.01.2019 is taken on record. That to

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give an opportunity of representation to the absent members, given the next date of hearing on dated 28.01.2019. That on the date of hearing of 28.01.2019, the Chairman and other Members of the Agriculture Produce Market Committee, alongwith the Advocate remain present, and their written reply and submission is taken on record.

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5.3 Mr. Pandya, the learned AGP submitted that the State Government has perused the Report of the Deputy Director, Agriculture Produce & Rural Finance and District Registrar, Surendranagar dated 27.12.2018 and pursuant to that the communication dated 11.01.2019 of Director, Agriculture Produce & Rural Finance, and thereafter issued the show cause notice and considered the written reply and representation made by the members of the Agriculture Produce Market Committee, Vadhvan, and arrived at the conclusion.

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5.4 Relying on the affidavit-in-reply filed by the respondent No.2 Mr. Pandya, the learned AGP submitted that the Committee was issued notice and while 09 of the members i.e.

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the writ-applicants sought adjournment and rest of the 05 members appeared before the Committee. The competent authority i.e. the respondent No.2 has passed reasoned order dealing with the points of determination pursuant to the show cause notice issued by the competent authority on 15.1.2019. The order is a reasoned order after taking into consideration the submissions made by the respondents No.5 to 9 and the evidence on record the impugned order dated 28.1.2019 came to be passed and the same is just and proper. No interference is called for in the order passed by the respondent No.2 dated 28.1.2019.

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5.5 Mr. Pandya, the learned AGP placed reliance on the following decisions :-

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2003 (1) GLR 97 Para-16

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2004 (1) GLH 603

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Submissions on behalf of the respondents No.5 to 9 :-

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Mr. V. C. Vaghela, the learned advocate appearing for

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the respondents No.5 to 9 submitted that the writ-applicants

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have merely averred that an opportunity of hearing is not given.

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6.1 Mr. Vaghela, the learned advocate placed reliance on paragraphs 4, 5 and 7 and submitted that the submissions on behalf of the respondents that the society was not served is incorrect in view of the fact that in para-4 the writ-applicants themselves have stated that the writ-applicant No.1 is a duly constituted society under Section 5 of the Act. In para-12 it is stated that show cause notice is issued to the Committee and not to the individual members.

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6.2 Mr. Vaghela, the learned advocate relied on Sections 4, 9, 11 and 46 of the Act and Rule 35 and submitted that the impugned order passed by the respondents was just and proper. Mr. Vaghela, the learned advocate relied on the decision of AIR 2020 SC 5215 wherein the parameters for considering the principles of natural justice extensively discussed by the Hon’ble Supreme Court. Mr. Vaghela, the learned advocate relied on paragraphs 33 and 39, more

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particularly 39 Clause (3) and (4).

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Heard Mr. B. M. Mangukiya, the learned advocate appearing for the writ-applicants, Mr. Bhargav Pandya, the learned AGP appearing for the respondent No.1 and Mr. V. C. Vaghela, the learned advocate appearing for the newly added respondents No.5 to 9.

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Position of law :-

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8 In the case of Varvabhai Nathabhai Rabari And Others

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Versus State Of Gujarat, reported in 2003 (1) GLR 97. Paragraph-16 reads thus :-

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“(16.) Mr.Zaveri has also relied upon the judgment of the Supreme Court in the case of M/S LABHA RAM AND SONS VS STATE OF PUNJAB reported in AIR 1998 SC 2086 in support of his submission that public auction is not a sine qua non while disposal of public property, to support his submission that the Market Committee is competent to dispose of the property. It is true that the public auction is not a sine qua non for disposal of public property, but at the same time it can not be forgotten that normally as far as possible public auction

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may be held with a view to ensure that the authority gets maximum price and everybody gets equal opportunity to participate. Further it is also to be remembered that the market committee has power to dispose of the property but as stated above such powers are coupled with the public duty. We find that there is something more than acting as a prudent, wise and responsible office bearers of the market committee. When the State Government had in totality of the circumstances and on the material available with it found that there are defaults in performance of duties and abuse of powers by causing huge financial loss to the market committee. We are unable to accept the submission of Mr.Zaveri that order of super-session is passed on the ground beyond the scope of Section 46 of the Act and, therefore, the judgment of the Apex Court in the case of Labha Ram and sons (supra) would be of no help to the appellants.

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(20.) Considering the overall facts and circumstances of the case and in view of the observations made by us earlier, we find that the State Government had sufficient material on record to form an opinion that the market committee had made persistent defaults in performance of its duties and has committed financial irregularities which has resulted into huge financial loss to the market committee and when the learned single judge of this

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court has also upheld the legality and validity of the decision of the State Government of superseding the market committee, we do not find any case for interference. We are in agreement with the view expressed by the learned single judge and accordingly we dismiss this appeal with costs which are quantified at Rs. 10,000.00.”

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8.1 In the case of Gautambhai Devshankar Dave Versus State

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Of Gujarat, reported in 2004 (1) GLH 603. Paragraphs-18 and 19 reads thus :-

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“(18.) The law is settled that the powers conferred on the High Court under Articles 226 and 227 of the Constitution of India are extraordinary and discretionary as distinguished from ordinary statutory powers. This is not a case where this jurisdiction is required to be exercised in favour of the petitioners. There is no jurisdictional error in the order of the Tribunal. It is not a case where the Tribunal has assumed not conferred on its jurisdiction or where it has failed to exercise the jurisdiction vested in it. Nor is there any error apparent on the record of its decision. The High Court does not sit as an Appellate Court and interference with pure findings of fact and appreciation of evidence is not permissible.

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Reappreciation of evidence cannot be undertaken. Even if on same set of facts, circumstances and evidence on record, a different view may be possible, that by itself is not enough to permit the High Court to intervene. A mere wrong decision does not clothe the High Court with jurisdiction, unless it is shown that the Tribunal has reached a decision without any evidence in support of same, or that it has considered evidence which is partly relevant and partly irrelevant or that it arrived at a decision no reasonable person would have reached. None of the aforesaid factors exist in the present case so as to warrant any interference.

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(19.) Though it was submitted that the entire order was based and finalized only on ground of abuse of powers as stipulated in Sec. 46 of the Act, on a plain reading of the order dated 26.9.2003 it is apparent that the authority has found that the Market Committee has persistently defaulted in performing the duties imposed on it by the Act or under the Act and also by not following due procedure coupled with administrative improprieties abused its powers to entail financial loss. Therefore, if any one of the three conditions laid down in Sec. 46(1) of the Act is shown to have been fulfilled the State Government would have jurisdiction to act against such Market Committee and supersede the same.”

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8.2 In the case of State Of Uttar Pradesh Vs. Sudhir Kumar

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Singh, reported in AIR 2020 SC 5215. Paragraph-33 and 39 read thus :-

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“(33.) What is important to note is that it is the Court or Tribunal which must determine whether or not prejudice has been caused, and not the authority on an ex parte appraisal of the facts. This has been wellexplained in a later judgment, namely Dharampal Satyapal Ltd. v. Dy. Comm. Of Central Excise, Gauhati and Ors. (2015) 8 SCC 519, in which, after setting out a number of judgments, this Court concluded:

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But that is not the end of the matter. While the law on the principle of audi alteram partem has progressed in the manner mentioned above, at the same time, the courts have also repeatedly remarked that the principles of natural justice are very flexible principles. They cannot be applied in any straitjacket formula. It all depends upon the kind of functions performed and to the extent to which a person is likely to be affected. For this reason, certain exceptions to the aforesaid principles have been invoked under certain circumstances. For example, the courts have held that it would be sufficient to allow a person to make a representation and oral hearing may not be necessary in all cases, though in some matters, depending upon the nature of the case, not only fullfledged oral hearing but even cross-examination of witnesses is treated as a necessary concomitant of the

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principles of natural justice. Likewise, in service matters relating to major punishment by way of disciplinary action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even postdecisional hearing is held to be permissible. Further, the courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on.

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We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasising that the principles of natural justice cannot be applied in straitjacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason perhaps because the evidence against the individual is thought to be utterly compelling it is felt that a fair hearing would make no difference meaning that a hearing would not change the ultimate conclusion reached by the decisionmaker then no legal

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duty to supply a hearing arises. Such an approach was endorsed by Lord Wilberforce in Malloch v. Aberdeen Corpn. [(1971) 1 WLR 1578], who said that: (WLR p. 1595)

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A breach of procedure cannot give [rise to] a remedy in the courts, unless behind it there is something of substance which has been lost by the failure. The court does not act in vain.

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Relying on these comments, Brandon L.J. opined in Cinnamond v. British Airports Authority [(1980) 1 WLR 582] that: (WLR p. 593)

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“…. no one can complain of not being given an opportunity to make representations if such an opportunity would have availed him nothing.”

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In such situations, fair procedures appear to serve no purpose since the right result can be secured without according such treatment to the individual.

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In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the courts. Even if it is found by the court that there is a violation of principles of natural justice, the courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non-grant of hearing has not caused any prejudice to the person against whom the action is taken. Therefore, every violation of a facet of

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natural justice may not lead to the conclusion that the order passed is always null and void. The validity of the order has to be decided on the touchstone of prejudice . The ultimate test is always the same viz. the test of prejudice or the test of fair hearing.

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xxx xxx xxx

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So far so good. However, an important question posed by Mr Sorabjee is as to whether it is open to the authority, which has to take a decision, to dispense with the requirement of the principles of natural justice on the ground that affording such an opportunity will not make any difference? To put it otherwise, can the administrative authority dispense with the requirement of issuing notice by itself deciding that no prejudice will be caused to the person against whom the action is contemplated? Answer has to be in the negative. It is not permissible for the authority to jump over the compliance of the principles of natural justice on the ground that even if hearing had been provided it would have served no useful purpose. The opportunity of hearing will serve the purpose or not has to be considered at a later stage and such things cannot be presumed by the authority. This was so held by the English Court way back in the year 1943 in General Medical Council v. Spackman [1943 AC 627]. This Court also spoke in the same language in Board of High School and Intermediate Education v. Chitra Srivastava [(1970) 1

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SCC 121], as is apparent from the following words: (SCC p. 123, para 7)

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“7. The learned counsel for the appellant, Mr C.B. Agarwala, contends that the facts are not in dispute and it is further clear that no useful purpose would have been served if the Board had served a show-cause notice on the petitioner. He says that in view of these circumstances it was not necessary for the Board to have issued a showcause notice. We are unable to accept this contention. Whether a duty arises in a particular case to issue a showcause notice before inflicting a penalty does not depend on the authority's satisfaction that the person to be penalised has no defence but on the nature of the order proposed to be passed.”

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In view of the aforesaid enunciation of law, Mr Sorabjee may also be right in his submission that it was not open for the authority to dispense with the requirement of principles of natural justice on the presumption that no prejudice is going to be caused to the appellant since the judgment in R.C. Tobacco [(2005) 7 SCC 725] had closed all the windows for the appellant.

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At the same time, it cannot be denied that as far as courts are concerned, they are empowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. This was so clarified in ECIL itself in the following words: (SCC p. 758, para 31)

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“31. Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the courts and tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the court/tribunal and given the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the court/tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the court/tribunal should not interfere with the order of punishment. The court/tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the courts/tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the court/tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment.”

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Keeping in view the aforesaid principles in mind, even when we find that there is an infraction of principles of

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natural justice, we have to address a further question as to whether any purpose would be served in remitting the case to the authority to make fresh demand of amount recoverable, only after issuing notice to show cause to the appellant. In the facts of the present case, we find that such an exercise would be totally futile having regard to the law laid down by this Court in R.C. Tobacco [(2005) 7 SCC 725].

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(emphasis supplied)”

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(39.) An analysis of the aforesaid judgments thus reveals:

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(1) Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.

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(2) Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest.

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(3) No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the

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Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice.

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(4) In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person.

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(5) The prejudice exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the nonobservance of natural justice.”

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8.3 (a) In the case of Union of India and Ors., vs. Surya Phosphate Ltd., and Anr., reported in (1992) 4 SCC.

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The controversy involved was interpretation of Circular letter dated June 19,1982 issued by the Fertilizer Industry Corporation Committee, Government of India to all manufacturers of Single Super Phosphate. Did the Circular letter represent to the manufacturers that they would be paid differential rate of subsidy based on the actual ex-factory price

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of each of the manufacturing units or did it inform them that the subsidy would be based on the ex-factory price of each of the units which would be worked out by the FICC.

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It was held that in absence of norms for working out of costs of different components, there would virtually be a chaos and arbitrariness. The aforesaid ratios as laid down by the Hon’ble Supreme Court is not applicable in the facts of the present case in view of the fact that the writ-applicants themselves have stated that the show cause notice was duly issued to them i.e. Committee and the Committee was also represented before the respondent authority.

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(b) In the case of Vallabhbhai Laxmanbhai Roy vs. Mona Khandhar & Ors., reported in 2005 (4) GLR 3274.

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The aforesaid decision is not applicable in the facts of the present case, since it was the case of absence of material on record to establish the charges. The documents were not supplied. It was the case in which clarification in form of report was sought from the Executive Engineer on 12.8.2002 by the respondent No.1 and that the said report was never

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supplied to the petitioner and it was held that the material which was relied on by the respondent authority was germane and was collected behind the back of the petitioner and was relied upon without supplying the same and, therefore, it was held that the same was in violation of principles of natural justice.

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In the present case the documents relied upon by the respondent authority were forming a part of the show cause notice which was issued to the petitioner Committee and no new documents were relied upon by the respondent authority while passing the impugned order.

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(c) In the case of Dipakbhai Mohanbhai Patel vs. A. S. Patel or His Successor in the office & Ors., reported in 2009 (3) GLR 2167.

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The charges leveled against the appellant pertained to collective default on the part of the Bopal Gram Panchayat. In exercise of powers under Section 253 of the Act and not 57(1) of the Act. The orders passed by the District Development

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Officer were set aside on the ground that the same was beyond the scope of the authority and the same suffered from the vice of being beyond the scope of the show cause notice as well as had suffered from non-application of mind. Consequently the Hon’ble Division Bench allowed the appeal.

¶182

In the facts of the present case, it is not even the case of the writ-applicant that issuance of show cause notice is beyond the scope of the respondent authority. In fact, the show cause notice as issued to the writ-applicant has been adjudicated by the respondent No.1 authority in true latter and spirit considering the documents and the evidence which were produced on record.

¶183

(d) In the case of Mehsana District Cooperative Milk Producers Union Ltd., & Ors., vs. Registrar, Coopeative Societies, Gujarat State & Ors., reported in 2021 (3) GLR 2339.

¶184

It was held that the petitioners were not given sufficient opportunity to file the reply to the charges under the show cause notice and that the petitioners were deprived of

¶185

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opportunity of hearing and the same resulted in supersession of the Managing Committee, therefore it was held that the said show cause notice was violative of principles of natural justice.

¶188

Undisputedly in the present case the show cause notice dated 15.1.2019 was issued to the writ-applicant Committee, the Committee appeared before the respondent authority. The authority adjourned the proceedings to facilitate the writapplicant. The proceedings came to be adjourned twice at the request of the writ-applicant. However, on 28.1.2021, the Committee appeared with the advocate and sought for further adjournment and the same was not granted by the respondent authority. It was the writ-applicant who chose not to remain present before the authority while seeking adjournment. Per contra, there were other members who filed their reply and made submissions and also remained present during the course of hearing.

¶189

In view of above, in the facts of the present case, the aforesaid ratio is not applicable in view of the fact that there cannot be any straight-jacket formula for testing the principles

¶190

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of natural justice.

¶193

:- Analysis

¶194

Having heard the learned advocates appearing for the respective parties, it appears that the main grievance of the writ-applicant is that the principles of natural justice are not followed while passing the impugned order dated 28.1.2019 by the respondent authority whereby the writ-applicant Committee is superseded without giving reasonable opportunity of hearing.

¶195

9.1 It appears that the show cause notice dated 15.1.2019 came to be issued by the respondent authority to the writapplicant society. The same is fortified in para-12 of the writapplication.

¶196

“12. The petitioners state that the show cause notice is issued to the committee and not to its individual members. Therefore, the general meeting of the committee is required to be called; the show cause notice is required to be placed in the hands of each of the Directors. The each and every member of the committee is to be supplied with all the relevant material and facts in relation to the charge incorporated in the show cause

¶197

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notice. After the due deliberations in the said meeting, the committee has to take a call and answer the show cause notice by passing appropriate resolution. The show cause notice dated January 15, 2019 was received by the petitioner on January 17, 2019. The said show cause notice stated that the reply if any in writing shall be submitted within 5 days. Since the notice was received on January 17, 2019, the committee appointed the advocate and the advocate of the committee Mr. Shrey Dave appeared before the respondent no. 2 and sought time by submitting an application for adjournment. The respondent no. 2 refused to take the said application and said that whatever is to be said; any time is to be requested, it shall be done only on the date of hearing fixed on January 24, 2019 at 11.30 am. Therefore, the advocate of the petitioner without submitting the application returned. A copy of the application which was prepared for the adjournment is annexed hereto and marked as Annexure E to this petition.”

¶200

9.2 Pursuant to issuance of the show cause notice the writapplicants filed an application seeking adjournment on 24.9.2019, the respondent authority acceded to the said request and listed the application for further hearing on 28.1.2019. It appears that in the meantime, the writ-applicants approached

¶201

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this Court preferring Special Civil Application No.2756 of 2019. It appears that the Special Civil Application No.1758 of 2019 filed by the writ-applicants came to be withdrawn by the writapplicants as having become infructuous.

¶204

9.3 At this stage, it is apposite to refer to the show cause notice dated 15.1.2019 duly issued by the respondent authority. The said show cause notice came to be issued to the writ-applicant - Committee on the following grounds :-

¶205

“As stated above, the daily wagers (1) Jaydeepbhai Vanrajbhai Paraliya, resident of Tuva, Taluka: Wadhwan (2) Dharmrajsinh Mahendrasinh Sagar, resident of Kherali, Taluka: Wadhwan (3) Rameshbhai Narshibhai Golani, resident of Khodu, Taluka: Wadhwan, are in blood relation of the present Director of the market committee (1) Harjibhai Valabhai Paraliya (2) Mahendrasinh Jemubhai Sagar, resident of Kherali, Taluka: Wadhwan (3) Narshibhai Ramjibhai Golani, resident of Khodu, Taluka: Wadhwan. While the remaining employees have family relation with other present Directors of market committee. As per the submission of the applicant, any type of

¶206

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advertisement was not published for the recruitment of these employees. No recruitment process was carried for it. Hence, it appears that the employees were recruited against the rules. Thus, the instructions of the circulars regarding recruitment issued by the Director, Agriculture Market and Rural Finance, Gandhinagar, dated 16/01/1990, 18/02/2002 were violated and it was observed that the duties assigned vide provisions of section-23 and section-26 of the Market Act, were not performed.

¶209

(2) About recruiting the retired disputed employees of the market committee:

¶210

As per the submission of the applicant the Secretary Mr. V.B. Dodiya, retired on 30/04/2017 was recruited with the fixed monthly pay of Rs.20,000/- from 01/04/2018. The matter of appointing the retired secretary as advisor does not appear compatible with the matter of reducing expenditure by appointing the retired employees by the market committee and appointing the experienced retired secretary. Moreover, the proposal of reducing the expenditure and appointing about 10

¶211

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¶213

employees from the close relatives of the Director without conducting any type of recruitment process do not appear compatible. There is no provision of appointing retired secretary as advisor and this post is filled, even though such post is not sanctioned by the Director, Agriculture Market and Rural Finance, Gandhinagar. Thus, the instructions of the circular regarding recruitment issued by the Director, Agriculture Market and Rural Finance, Gandhinagar, dated 05/04/1997 were violated and it was observed that the duties assigned vide provisions of section-23 and section-26 of the Market Act, were not performed.

¶214

(3) Regarding taking significant decisions of the Market Committee from the President in the Sitting.

¶215

The matter of removing Shri N.H. Gohil the permanent employee of the Market Committee from service and the contract given by the Market Committee has been extended, spending large amount of money to increase facilities and such important matters like to initiate tender process to call the rates for selling the land purchased for the Sub-yard of

¶216

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¶218

cotton by the Market Committee are not included in the agenda notice of the general meeting, has been decided by submitting to the President. Due to which administrative transparency is not maintained. And most of the important decisions are taken the President which is against the principle of democracy / cooperative system. The Market Committee is an established body as well as Public Body under Section-10 and the office-bearers of the Market committee should do it in

¶219

a transparent manner keeping in mind the principles of trusteeship and the principles of financial fairness which has not been done accordingly.

¶220

(4) Regarding repairing of old 72 shops-cum- godowns of the Market Committee.

¶221

Despite most of the shop-cum-godown holders have raised resistance, the repairing work has been taken in hand. According to the letter dated 02/05/2011 of the Engineer of Government, it was informed to demolish the godown. Moreover, also despite the Resolution No.2 of the general meeting of the Market Committee dated 28/03/2016, it has

¶222

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¶224

been decided to demolish the godown but despite the repair work being dangerous and against the rules, it has been carried out. Which shown carelessness of the Committee. The office-bearers of the Market Committee should do the administrative process of godown repairing in a transparent way keeping in mind the principles of trusteeship which has bee been not carried out. And the same, it has been found in default in performing duties as per Section-23 of the Market Act.

¶225

(5) About exceeding the Establishment expenses of

¶226

Market Committee of more than 40%

¶227

The establishment expense of the Marketing Committee is more than 40 %, which is against Rule – 41 of the Gujarat Agricultural Produce Markets Rules, 1965. As the establishment expense of the Marketing Committee is 7.68 % more than the determined limit as per rules, in such circumstances it does not found compatible with each other about appointing the relatives of the Director in large scale without following any type of Recruitment process. The Office

¶228

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¶230

bearers of the Marketing Committee have not maintained the principles of Trusteeship as well as principles of financial relevance as well as they have violated Rule no. 41 of Gujarat Agriculture produce Markets Rules, 1965.

¶231

(6) About paying of very big amount as Advance Payment by the Marketing Committee in the name of Project Consultant:

¶232

The Memorandum of Agreement is executed by the Marketing Committee with M/s. Abhyuday Techno - Economic Consultant Pvt. Ltd. According to this Agreement, a Contract has been done to provide some facilities to the Marketing Committee and to do Market Analysis, prepare D.P.R. so as to get the aid from State as well as Central Govt. to built Agro Infrastructure and Fruit Pro. Cluster, to draft/prepare Application for help/assistance of the Central or State Govt. and to be helpful to the project in all the aspects. Though no any D.P.R. have been produced regarding this matter. Despite that, the advance payment of a very big amount of Rs. 10,00,000/- (with Tax Rs. 11,80,000/-) have been paid by the

¶233

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¶235

Marketing Committee. It is not considered to be reasonable in any way to make payment of such a big amount without the production of D.P.R.. Also all the authority regarding big Project like 70.00 Crore have been allotted to the Chairmen of the institution vide Resolution no. 9 of General Meeting dtd. 18/01/2018. This matter is also related to the Centralization of the Power. It is beneficial that decision about such matters should be taken after discussing it in the General Meetings of the Committee time to time. The Board of Directors have totally failed to carry out their duties under Sections – 23 and

¶236

26 of Markets Act by neglecting the principles of Trusteeship and Financial relevance.

¶237

(7) Regarding usage of Innova Car of the market

¶238

committee:

¶239

The Innova car has been misused. A logbook is not maintained. Upon examination of the copy produced of the logbook from 24/07/2017, it is found that mainly the chairmen of the organization have used the car for 15 to 20 days in a month and office work, visit etc. have been shown against

¶240

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¶242

purpose of travel. It mainly shows travel to villages covered in market area, visit to other market committees and office work at Ahmedabad and Gandhinagar. But, particulars of the office work are not shown. The Chairman has travelled on 18/01/2018, 24/03/2018, 11/06/2018 and 23/07/2018 and also remained present in the meeting of the market committee. It appears from the continuous usage of the vehicle by only one person and the travel made without showing time that the logbook has been adjusted by filling it up hurriedly. The office-bearers of the market committee have not followed the principles of trusteeship and the principles of financial propriety.

¶243

A travel of 93 km has been made from Wadhwan to Malod, Kholdiyad, Kulgram, Madhad, Vastadi, Tuva, Gundiyada and return to Wadhwan on 18/01/2018.

¶244

A travel of 153 km has been made from Wadhwan to APMC Lakhtar, Viramgam, Lakhtar and return to Wadhwan on 24/03/2018.

¶245

A travel of 54 km has been made from Wadhwan to

¶246

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¶248

Latuda, Katuda, Bhadreshi, Karangadh, Bakarthadi,

¶249

Dudhrej and return to Wadhwan on 11/06/2018.

¶250

A travel of 53 km has been made from Wadhwan to Bhadreshi, Karangadh, Bakarthadi, Latuda, Katuda, Dudhrej and return to Wadhwan on 23/07/2018.

¶251

By traveling during the above dates, the meeting of the Market Committee has been attended, which does not appear to be consistent.

¶252

(8) Regarding the allotment of 33 blocks of vegetables:

¶253

Prior to the allotment of total 33 blocks by taking very little amount/deposit, the guiding method given by the Head Office regarding allotment of blocks, shop – cum – godown etc. has not been implemented. Competitive procedure has not been done for the allotment of the blocks through public auction. And the procedure done does not appear to be completely transparent. The matter of allotment to accomplices causing the financial loss of Rs. 24,10,000/- is serious. Therefore, it appears prima-facie that the Committee has committed financial misappropriation. The provisions of the

¶254

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¶256

circular dated 27/11/1999 regarding the allotment of shops have been clearly violated. Further, it appears that the damage has been caused to the interests of the Market Committee.

¶257

(9) Regarding the auction of cotton in the market yard:

¶258

The auction of the cotton crop is not held in the

¶259

Market Committee and a false auction is shown after directly registering false vehicles of cotton. Further, except vegetables, the trade of other articles does not appear to be done in the yard. Duty has not been performed after directly violating section – 23 and 26 of the Market Act.

¶260

(10) Regarding to appoint the Asst. Secretary against the

¶261

provision in the Staff Schedule:

¶262

Despite there is no provision in the staff schedule of

¶263

Market Committee, Mr. H.L.Yagnik has been promoted as an Assistant Secretary. No proposal regarding amendment in Staff Schedule has been submitted till today even after lapse of approx. nine months. Hence, the Market Committee has granted promotion against the Service Recruitment Rules of the Market Committee. This action is against the rules and thus,

¶264

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¶266

the Service Recruitment Rules have been violated.

¶267

The work for CCTV Camera and drainage of

¶268

rainwater in the market committee has been granted without tender. It appears prima-facie that the rates are called for from the accomplices only instead of inviting the rates by publishing advertisement in the newspaper as per rules. Such action should not be taken being public establishment. Thus, it appears that the Board of the Directors have failed to perform the duties assigned to them.

¶269

(12) To run canteen without tender:

¶270

The canteen has been given to run at extremely

¶271

nominal rates to the accomplices without tender. No competitive action to get more rate was taken or advertisement was given to give canteen to run. The procedure thereof does not appear to be transparent and it appears that it has been given to the accomplices. Such action should not be taken being public establishment. Thus, it appears that the Board of the Directors have failed to perform the duties assigned to

¶272

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them.

¶275

The Agriculture Produce Market Committee –

¶276

Wadhwan is established public body under Section-10 of the Gujarat Agriculture Produce Market Act, 1963. The officials of the market committee have failed to perform the duties entrusted to them under the Principles of the Trusteeship, Principles of Financial Fairness as well as under Section-23 and 26 of the Market Act. Moreover, the provision of Rule-41 of the Gujarat Agriculture Produce Market Rules, 1965 as well as the Recruitment Rules, Staff Schedule Rules and Circulars regarding allotment of establishments of the Director, Agriculture Marketing and Rural Finance, Gujarat State, Gandhinagar have also been violated.”

¶277

9.4 Pursuant to the aforesaid grounds as stated in the show cause notice dated 15.1.2019 the respondent authority fixed the hearing on 24.1.2019, pursuant to the proposal of the Director, Agriculture Produce and Rural Finance, dated 11.1.2019 to the State Government under Section 46(1) of the Gujarat Agriculture Produce Market Act, 1963 for supersession of the

¶278

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Market Committee in larger interest of members of the farmers of the market area and to appoint administrator. On 24.1.2019, four members of the said Committee remained present and placed their reply and two members represented themselves through written reply. It appears that the writ-applicants were represented through an advocate and Vakalatnama was duly filed and which was taken on record on 24.1.2019. To give a further opportunity of the representation to the writ-applicant that is the members the hearing was adjourned to 28.1.2019. On 28.1.2019, the Chairman and other members of the Committee alongwith their advocate remained present, however the respondent authority declined to grant further adjournment and written reply and submissions of the remaining members were taken on record. Considering the report of the Dy. Director, Agriculture Produce & Rural Finance and District Registrar, Surendranagar dated 27.12.2018 and pursuant to the commission dated 11.1.2019 by the Director, Agriculture Produce and & Rural Finance and the show cause notice dated 15.1.2019 the written reply and representation by the members of the Committee the respondent authority considered

¶281

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the submissions and passed the following order (true

¶284

translation) :-

¶285

(1) The establishment expenditure is of 76.40%, though the 10 employees was recruited. As per the regulations, the establishment expenditure must be below 40%. The Vadhvan Market Committee has violated instruction of Circular dated 16.01.1990 and 18.02.2002 and Rule 41 of the Market Rules, 1965.

¶286

(2) Though there is excess establishment expenditure, by appointing the retire employee, violated the instructions issued by Circular dated 05.04.1997, and considering the Rule 41 of the Market Rules, the Agriculture Produce Market Committee, Vadhvan fails to perform the duty cast under section 23 and 26 of the Gujarat Agriculture Produce "Market Act, 1963.

¶287

(3) That in the administration of the Market Committee, the important issues like, sale of stall, to increase the time of contract period, to increase the facilities, etc., to be issued

¶288

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through the Agenda Notice and in a democratic way, but all such important issued were taken into meeting at the instance of the Chairman desk and therefore, the Office bearers of the Vadhvan Market Committee has not performed the business in a democratic principles, and fails to administer on the principles of trusteeship and also found the business transacted in violation of section 23 and 26 the Gujarat Agriculture Produce Market Act, 1963.

¶291

(4) That by communication dated 02.05.2011, the Engineer of the State Government has opined not to use the same, and to take appropriate steps. Though the Market Committee, Vadhvan by is Resolution No.2 of dated 28.03.2016, resolved that the building . is damaged during the earthquake, and looking to the present condition, building is requires to be demolished. Though the, the building is repaired, and this is in violation of section 23 and 26 of the Gujarat Agriculture Produce Market Act, 1963.

¶292

(5) That without making in procedure, the Market Committee, Vadhvan, for the new project, entered in to

¶293

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Memorandum of Agreement, to prepare the Draft Project Report, paid the advance amount of Rs.11,80,000/- to the Abhuday Technomic Consultant Pvt. Ltd, and violated the principles of the trusteeships and also violated the duty assigned under section 23 & 26 of Gujarat Agriculture Produce Market Act, 1963.

¶296

(6) The Chairman, Agricultural Produce Market Committee, Vadhvan is using the Innova Car for an average 15 to 20 in a months and shown the details that for Office work but not mentioned that for which work the vehicle is utilized.

¶297

(7) That in allocation 33 stalls, without obtaining the prior permission of the 33 shops cum godown, and not followed the prescribed procedure for such auction for allocation of stalls. By not following the due procedure of auction, sale loss is occurred of Rs.24,10,000/- to the Market committee. It primafacie reveals that the Market committee has misappropriated the funds. In allocation of stall, deposit of Rs.2.50 lacs is shown, out of which 1.50lacs is accepted by cheque and

¶298

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¶300

remaining amount is accepted in cash, for which no receipt is given. This is not explained in agreement also, and therefore caused a financial loss and fails to perform the duties cast under section 23 &26 of the Gujarat Agriculture Produce Market Act, 1963.

¶301

(8) In market yard the auction of cotton is not made, though

¶302

the auction of cotton sale is shown in the market yard, but in fact in the market yard there is trade of vegetables only.

¶303

(9) There is no sanction post of Assistant Secretary in the staff schedule, and given the promotion to the post of Assistant Secretary, which is violation of the Rules, and failed to perform the duties cast under section 23 & 26 of the Gujarat Agriculture Produce Market Act, 1963.

¶304

(10) In allocation of work for the CCTV camera installation

¶305

and for the work of storm water line, is given without inviting any tender, or publishing any advertisement in the news papers. By which fails to perform the duties by the members of the Market Committee, Vadhvan.

¶306

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¶308

(11) That it is found that to run the Canteen, no tenders is issued or any advertisement is given, nor tried to get the more rent of the canteen and thus fails to perform the duties cast under section 23 & 26 of the Gujarat Agriculture Produce Market Act, 1963.

¶309

Considering the above, the competent authority proceeded to pass the following order which reads thus :-

¶310

// ORDER //

¶311

“I, V.B. Thakor, Deputy Secretary (Finance), Agriculture, Farmers Welfare and Co-operation Department, Secretariat, Gandhinagar, on the basis of power conferred under Section-46(1) of the Gujarat Agriculture Produce Market Act, 1963, do hereby supersede the existing Agriculture Produce Market Committee, Wadhwan and appoint the Deputy Director, Agricultural Marketing and Rural Finance cum District Registrar, Co-operative Societies, Surendranagar as an Administrator for the administration of Agriculture Produce Market Committee, Wadhwan.”

¶312

9.5 It appears that the impugned order dated 28.1.2019 is

¶313

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¶315

passed taking into consideration the relevant provisions of law. Sections 23, 26 and 46 of the Gujarat Agriculture Produce Market Act, 1963 :-

¶316

“SECTION 23 : Powers and duties of market committee

¶317

A market commit- tee shall exercise the powers and perform the functions and duties conferred or imposed on it by this Act and the rules

¶318

SECTION 26 : Duties of market committees

¶319

(1) It shall be the duty of every market committee to maintain and manage the market and standardisation of the Agricultural produce as may be prescribed, to provide such facilities in the market as the Director may from time to time direct and to enforce in the market area the provisions of this Act, the rules, bye-laws and the conditions of licence granted under the Act in connection with the purchase and sale of the agricultural produce with which it is concerned. It shall also be the duty of every market committee to collect and maintain such information relating to market intelligence as may be prescribed and to supply the same to Government whenever so required.

¶320

"(2) Notwithstanding anything contained in this Act, a market committee shall, as directed by the Director with the approval of the State Government, carry on the business of,-

¶321

(i) purchasing or selling of such agricultural produce;

¶322

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(ii) cleaning, grading, sorting, branding, processing, value addition, godown facility for storage, cold storage, marketing as also the contract farming, of such agricultural produce for sale;

¶325

(iii) ,purchasing of such agricultural produce at the rate of minimum support price as determined by the Government, for which such market committee shall not require any licence under this Act.".

¶326

SECTION 46 : Super-session of market committee

¶327

(1) If in the opinion of the State Government a market committee is not competent to perform or persistently makes default in performing the duties imposed on it by or under this Act or abuses its powers the State Government may, by notification in the Official Gazette, supersede such market committee:

¶328

Provided that before issuing a notification under this sub- section, the State Government shall give a reasonable opportunity to the market committee for showing cause why it should not superseded and shall consider the explanation and objections, if any, of the market committee.

¶329

(2) Upon the publication of a notification under sub-section

¶330

(1) superseding a market committee the following consequences shall cause, namely:-

¶331

(i) all the members as well as the Chairman and ViceChairman of the market committee shall as from the

¶332

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¶334

date of such publication be deemed to have vacated their respective offices.

¶335

(ii) the State Government may at its discretion, either order that a new market committee be constituted under section II , or make such arrangements for carrying out the functions of the market committee, as it may think fit; and

¶336

(iii) all the assets vesting in the market committee shall, subject to all its liabilities, vest in the State Government.

¶337

(3) If the State Government makes an order under clause (ii) of sub-section (2), it shall transfer the assets and liabilities of the market committee as on the date of such transfer, to the new market committee constituted under section 11 or to the person or persons, if any, appointed for carrying out the functions of the market committee, as the case may be.

¶338

(4) If the State Government does not make such an order, it shall transfer all the assets of the market committee which remain after the satisfaction of all its liabilities to the State Agricultural Produce Markets Fund constituted under section 34 . The Director shall utilise such assets for such object in the areas as he considers to be for the benefit of the agriculturists in that area.”

¶339

9.6 In view of the aforesaid provisions of law, the law as referred to above and the ratio as laid down by this Court and

¶340

the Hon’ble Supreme Court as referred above, the scope of

¶341

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¶343

judicial scrutiny and review is restrained to the procedural aspects on the points of principles of natural justice and where the order passed is so perverse that the said order could not have been passed, had the writ-applicant been heard. From the materials on record and considering the reasons recorded by the respondent authority, it appears that the establishment expenditure is far higher than the permitted expenses. It appears that there is violation of instructions issued by the Circular dated 5.4.1997 and considering the Rule 41 of the Market Rule the Committee has failed to perform the duty cast on the Committee under Sections 23 and 26 of the Act, 1963. Important decisions were taken at the instance of the Chairman and the office bearer of the Market Committee and the Committee failed to perform, following the democratic principles having violated the provisions of Sections 23 and 26 of the Act. Amongst the other grounds that were considered by the respondent authority glaringly, 33 stalls were allotted without obtaining prior permission of the owners of the 33 shops-cum-godowns and the procedure for auction was not followed for allocation of the said stalls. It appears that in

¶344

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¶346

view of above the Committee has incurred loss approximately to the tune of Rs.40,10,000/-.

¶347

9.7 Having considered the aforesaid, this Court is in agreement with the view expressed by the respondent authority and this Court is not inclined to interfere in the order dated 28.1.2019 passed by the respondent authority. During the course of hearing this Court was informed that the tenure of the Committee even otherwise has come to an end on 20.7.2022. On the aforesaid ground also this Court is not inclined to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. No interference is called for under Article 226 of the Constitution of India, more particularly in view of the fact that there is no error of jurisdiction committed by the respondent authority and the findings arrived at by the respondent authority are findings of fact to which this Court is not inclined to interfere.

¶348

In view of above, the present writ-application stands dismissed. No order as to costs.

¶349

(VAIBHAVI D. NANAVATI,J)

¶350

K.K. SAIYED

¶351

Page 52 of 52

Mohanbhai Dahyabhai Patel v. State of Gujarat

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Mohanbhai Dahyabhai Patel v. State of Gujarat

Case brief

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What did the court decide?

What the court decided

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