HIRABEN SHANKARLAL PATEL Vs. STATE OF GUJARAT

JUDGEMENT

(1.) By way of this Special Civil Application under Art. 226 and 227 of the Constitution of India, the petitioner has challenged the order dated August 09, 1994 passed by the Deputy Secretary (Appeals) Agriculture Cooperation and Rural Development, upholding the order dated May 25, 1994 passed by the Joint Director (Textiles), Cottage and Rural Industries, Gujarat State, Gandhinagar, and the order of Liquidator dated 25.01.1992.

(2.) The brief facts leading to the present Special Civil Application are that one Mahila Gruh Udhyog Sahakari Mandali Ltd. (hereinafter referred as "the Society") was registered under the provisions of the Gujarat Co-operative Societies Act (hereinafter referred to as "the Act") in the year 1985 for an object inter alia to undertake the activities of dealing in and manufacturing of and/or providing job work facilities to the females for manufacturing of various edible items like papad, Khakhra etc. and other items of brown papers and plasticbags, ready-made clothes etc. All the members of the Society are female members. The petitioner is one of the share holder and she was elected as President of the Soceity alongwith other office bearers in the year 1988. The Society, in order to achieve the object, installed machineries for manufacturing paper bags. For the purpose of installation of the machineries, the Society had to obtain the loan from the District Industries Center. At the time when the petitioner took over as the President of the 851 Society, the factory was not working. On account of an accident, the main machine for manufacturing paper bag was damaged. The financial condition of the Society detoriated on account of accident. Because of the poor financial condition of the Society, it was wound up as per the order dated January 02, 1991 passed by the District Registrar, Cooperative Societies. The respondent No. 3 was appointed as the liquidator of the Society. The say of the petitioner is that the respondent No. 3 took the charge of all the properties of the Society except of the machine of paper bag, inspite of the fact that she offered to handover. The liquidator refused to accept the same on the ground that the machine was in damaged condition and out of order. On the one hand, the liquidator did not take possession of the machine and on the other hand, he issued a notice dated 23.11.1991 informing the petitioner that dead stock of the machinery worth Rs. 25,242/- has not been handed over by her and as such, if the possession is not given, she will be liable to pay the interest at the rate of 18% per annum recoverable from the Society as pe' the procedure provided under Sec. 110 of the Act. The petitioner replied to the said notice, stating inter alia that the liquidator on his own has not taken possession of the said machine. She also submitted that the machine is lying in the building and the key of the building was with the liquidator and therefore, the question of taking the possession thereof does not arise. The liquidator by order dated 25.01.1992 ordered for recovery of the amount of Rs. 69,686/- with interest at the rate of 10% per annum w.e.f. 17.1.1991. The District Registrar, Mehsana was also requested to issue a Recovery Certificate against the petitioner and further, the Special Recovery Officer, Mehsana was asked to recover the amount from the petitioner. The petitioner thereafter received a notice dated 24.12.1992 from the Special Recovery Officer under Sec. 152 of the Bombay Land Revenue Code, calling upon the petitioner to make payment of Rs. 56,242/- together with interest. The petitioner received another notice dated 09.08.1993 from the Special Recovery Officer. The petitioner ultimately preferred an appeal before the District Registrar, Cooperative Societies, who initially granted the stay, but the same was subsequently vacated, on the ground that he has no power to entertain the appeal and the remedy to the petitioner was available under Sec. 153 of the Act. The petitioner thereafter preferred an appeal under the provisions of Sec. 153 of the Act to the Joint Director (Textiles), Cottage and Village Industries, Gujarat State, which was rejected by the order dated May 25, 1994. Against the said order, the petitioner preferred a revision before the State Government, which was also rejected by the order dated August 09, 1994.

(3.) It is contended by Mr. Jayant Patel, learned counsel for the petitioner that the order of the liquidator in purported exercise of the powers under Sec. 110(h) of the Act of 1961 to recover a sum of Rs. 69,686/- is ex facie illegal as, the said provision does not give power to the liquidator to fix the liability of the members or the past members in respect to the contribution to the assets of the Society. He further submits that such a power is vested with the Registrar, Cooperative Societies under Sec. 93 of the Act. In the instant case, no inquiry under Sec. 93 of the Act has been held. It is also submitted that the Registrar has proceeded on the promises of incorrect fact that, inspite of the repeated letters, the charge was not handed over by the President of the Society. He further submits that, for the first time, before the Joint Director (Textiles), a reference was made to the letter dated August 22, 1991, which was a non-existing documents. On the other hand, Mr. Tushar Mehta, learned counsel for the respondents submits that the moment the liquidator is appointed, the entire property of the Society is vested in him in view of the provisions of Sec. 108 (5) of the Act. He further submits that the word used 'contribution' under Sec. 110(h) of the Act cannot be narrowly construed as simply a share contribution. On the facts of the case, he submitted that the order of recovery is perfectly justified as the liability has been confessed by the petitioner.