TaxTMI 
TaxTMI 
2014 (11) TMI 1008
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....t") in order to consolidate and amend the laws relating to the cooperative societies in the State of Gujarat. Thereafter, the Act was amended by the Act of 1982. Initially, as per the Act of 1961, the Managing Committee of the Co- operative Society was to be constituted in accordance with the Act, Rules and bye-laws. By the Act of 1982, the proviso was inserted by way of an amendment to the effect that so far as the committee of a society falling in the category of Section 74C(1) of the Act is concerned, the rotation for retirement, if provided by the bye-laws of a particular number of members of the Managing Committee shall cease to remain in force. 5. Further, as per the Act of 1982, Section 74C together with the other provisions of the amending Act was brought on the statute book, which provided that the election of the members of the Managing Committee/Board and the office bearers on the committees of such specified societies shall be conducted in the manner laid down by or under Chapter XI-A of the Act, which was also simultaneously inserted by way of amendment Act of 1982, for conducting elections to the committees and office bearers of certain societies which are so specifi....
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....tters were carried before this Court, but subsequently came to be withdrawn. Therefore, the decision of the Gujarat High Court in the aforesaid case became final and has been operating since. 8. Subsequently, certain provisions were deleted but Section 74C and other provisions in relation to the conduct of election, including Chapter XI A and the Rules, remained in the statute book. Therefore, legal position remained as per the original Act even after the Amendment Act of 1982. The election of the Managing Committee members of a society other than the specified societies was required to be held as per the bye laws of such societies. Whereas, so far as the specified societies covered by Section 74C(1) of the Act are concerned, the election was required to be held as per Chapter XI A read with the Rules of 1982. 9. A legal question for interpretation to Rule 3-A (8) and also the validity of bye-laws clause No. 35(1)(A) of Sabarkantha Milk Producers Union Ltd. arose before the High Court in the case of Antakampa Milk Producers Co-operative Society Limited v. Sabarkantha Milk Producers Union Ltd.[2]. The learned Single Judge of the High Court in the said case held that Section 74C su....
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....lk Producers Cooperative Society Ltd., the Division Bench set aside the bye laws clause No. 35 (1) of the said Society which provides for voting right for more than one seat in one constituency. 12. Further, the constitutional validity of Rule 3-A (8) of the Rules was again challenged before the High Court of Gujarat, in the case of Banaskantha District Cooperative Milk Producers Union Ltd. v. State of Gujarat[5], wherein the Division Bench of the High Court held that if any of the Rules are lawfully framed under the provisions of the Act and restrictions were imposed in relation to the subject matter of any of the clauses of the registered bye laws of the Society, such restrictions must be adhered to by it and any such clause in the bye-laws which is in violation of the restriction imposed by the Rules should be deleted. It was further held that the State Government while framing the impugned provisions of the Rules has not deviated from the principles mentioned under Section 74C (3) of the Act, but it has only created a position by making provisions of the election of members from the General Body. The Division Bench of the High Court held that Rule 3-A (8) of the Rules is neith....
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....ing down certain guidelines in the Rules for the amendment of the relevant clauses of the registered bye-laws of the appellant-Societies. Rule 3-A (8) takes away the vested rights conferred upon the members of the society. The conferment of power upon the Collector for carving out delimitations of a Specified Co-operative Society/Societies is contrary to the provisions of the Act and Rules and asking the Chief Executive Officer to prepare the draft constituencies by dividing the area of societies into constituencies would amount to taking away the right of its members to exercise their vote in favour of all the candidates who contest from the constituencies. Therefore, the interpretation given to Section 3-A (8) of the Rules and upholding the constitutional validity in conferring such power upon the Collector to demark the constituencies of appellant societies infringes the rights of the members of the societies. Hence, it is contended that the impugned judgment is liable to be set aside. 15. The State Government has filed its counter affidavit justifying the impugned judgment contending that the findings and reasons recorded by the full Bench of the Gujarat High Court by answerin....
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....gement Committee of specified society is scheduled to be held. Further, as specified in the sub rule (9) of Rule 3-A, such powers are to be exercised by the Collector, notwithstanding anything contained in the bye laws of such society. The Collector has to exercise the power for delimitation of the constituencies prior to the publication of the list of voters. Further, as rightly stated by the High Court in the impugned judgment that when a specific power is conferred in a specific contingency to a different authority, such power has to be read in addition to the general power for the amendment in the bye-laws. Thus, the bye laws of any society have to be in conformity with the provisions of the Act and the Rules. 20. It is obligatory on the part of any specified society to bring about the amendment in its registered bye-laws in conformity with the provisions of the Rules and more particularly Rule 3-A (8) and (9). But if the society/societies have not amended their bye laws, the same has to be in conformity with the said Rules by getting suitably amended; the effect of the Rule would not stand nullified or inoperable. For this purpose sub rule (9) gives the power to the Collector....
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....an 7 representatives can be elected from a specified Co- operative Society to the Board or Management Committee, then it is the duty of the societies to adhere to it and not exceed the specified number. Thus, the bye laws of a Co-operative Society, in order to achieve the constitutional object, must be brought at par with the laws and statutory provisions of the Societies Act. They cannot override the provisions of State or Central laws. In Kuldip Nayar's case (supra), this Court after referring to various Constitutional Bench judgments and other judgments of this Court for the purpose of interpretation made by this Court in relation to phrases used in the Preamble of the Constitution of India such as "sovereign democratic republic" and "Parliamentary democracy" as the basic feature of the Constitution of India, held as under:- "101. In the same case (Indira Nehru Gandhi case, reported in 1975 Supp SCC 1), Chandrachud, J. in para 691 of his separate judgment ruled as under: (SCC pp. 261-62) "Ordinary laws have to answer two tests for their validity: (1) The law must be within the legislative competence of the legislature as defined and specified in Chapter I, Part XI of the Co....
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....ing on the circumstances. (b) Two limitations at least are laid on its plenary character in the exercise thereof. Firstly, when Parliament or any State Legislature has made valid law relating to or in connection with elections, the Commission, shall act in conformity with, not in violation of, such provisions but where such law is silent Article 324 is a reservoir of power to act for the avowed purpose of, not divorced from, pushing forward a free and fair election with expedition. Secondly, the Commission shall be responsible to the rule of law, act bona fide and be amenable to the norms of natural justice insofar as conformance to such canons can reasonably and realistically be required of it as fairplay-in-action in a most important area of the constitutional order viz. elections. Fairness does import an obligation to see that no wrongdoer candidate benefits by his own wrong. To put the matter beyond doubt, natural justice enlivens and applies to the specific case of order for total re-poll, although not in full panoply but in flexible practicability. Whether it has been complied with is left open for the Tribunal's adjudication." 343. The case Kihoto Hollohan v. Zachillhu....
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....ic, periodic exercise. The little man, in his multitude, marking his vote at the poll does a social audit of his Parliament plus political choice of this proxy. Although the full flower of participative Government rarely blossoms, the minimum credential of popular Government is appeal to the people after every term for a renewal of confidence. So we have adult franchise and general elections as constitutional compulsions. "The right of election is the very essence of the constitution" (Junius). It needs little argument to hold that the heart of the Parliamentary system is free and fair elections periodically held, based on adult franchise, although social and economic democracy may demand much more. 46. It is an interesting sidelight that in America it has been held to be but fundamental fairness that the right to an administrative hearing is given. Natural justice is being given access to the United Nations. It is notable that Mathew, J. observed in Indira Gandhi (p. 513, see p. 128, para 303)(reported in 1975 Supp SCC 1): "If the amending body really exercised judicial power, that power was exercised in violation of the principles of natural justice of audi alteram partem. Eve....