Judgement

This petition under Article 226 of the Constitution of India is filed by Aadhumik Patel Park Co-operative Housing Society Limited and its Member challenging the order dated 29.8.2000 passed by respondent No.1 and the order dated 2.11.1996 passed by respondent No.3 [at Annexure "A" and "B" respectively], whereby, the registration of the petitioner-society came to be cancelled under Section 20 of the Gujarat Cooperative Societies Act, 1961 [for short, the Act].

2. The facts, briefly stated, are as under:

Petitioner No.1 is a Society registered under the provisions of the Act vide Registration No. 1853 dated 6.2.1967 and petitioner No.2 is a Member of the Society.

2.1. It is the case of the petitioner-Society that since last about 32 years, i.e. on the date of filing of the petition, the Society was functioning in accordance with the provisions of the Act, Rules, Regulations and Bye-laws and, when the Society commenced the business, it had enrolled 114 members and collected funds and, for the purpose of construction of houses, an agreement for purchase of land bearing Revenue Survey No.502/A, Vejalpur, admeasuring about 94380 sq.yards, was entered into between the parties. However, in view of the applicability of the provisions of the Urban Land Ceiling Act [for short, ULC Act], which was in force at the relevant point of time, the original owners of the land, who are respondent Nos. 4 to 26 herein and their representatives, had filed a declaration under the ULC Act. However, they had entered into an agreement with the Society as mentioned above. Since the process for getting exemption under section 20 of the ulc act was undertaken, no final document was executed for the purchase of the land. In the meanwhile, the ULC Act also came to be repealed in the year 1999 and, therefore, with ulterior motive, respondent Nos. 4 to 26 herein sold the above-mentioned piece of land to a third party and, therefore, the petitioners filed Civil Suit No.251 of 1999 for specific performance of the agreement and the said civil suit is pending, according to the petitioners.

2.2. In spite of the fact that the Society had carried out its functions in accordance with the Act, Rules, Regulations and Bye-laws, respondent No.3- District Registrar, Co-operative Societies [City], Ahmedabad, passed an order on 2.11.1996 in exercise of powers under Section 20 of the Act by which the registration of the petitioner-Society bearing Registration No.GH-1853 dated 6.2.1967 came to be cancelled. Various considerations have weighed with the District Registrar for exercising powers under Section 20 of the Act, inter alia, the affairs of the Society were not carried out in accordance with the provisions of the Act, Rules, Regulations and Bye-laws. Even a notice issued by the District Registrar to the petitioner-Society to show cause as to why registration should not be cancelled under Section 20 of the Act was not responded. A public notice was also given by the District Registrar in widely circulated vernacular newspaper, namely, Gujarat Samachar on 5.6.1996 making it clear that, if oral or written reply was not submitted within one month from the date of advertisement of the above notice, registration of the Society would be cancelled under Section 20 of the Act but, in spite of the above procedure having been followed by the Authority, no reply was ever given. The District Registrar also considered the report of Special Auditor of the office of District Registrar, Co-operative Societies [City], Ahmedabad, about failure on the part of the Society to commence business within reasonable time on its registration and it was specifically observed by the Special Auditor in the said report that, though the Society was registered on 6.2.1967 and 114 members were enrolled, no construction of houses was ever made except agreement was entered into with some persons for acquiring the land for which permission of the Competent Authority was awaited. Thus, the Special Auditor of the office of District Registrar, Co-operative Societies [City], Ahmedabad, recommended cancellation of registration, which was taken into consideration by the District Registrar while passing the order dated 2.11.1996. At the same time, the District Registrar also found that, at the address shown by the Society, it was not functioning and even audit and inspection of the accounts were not carried out. Copies of the above order dated 2.11.1996 were sent to various authorities including the Manager, Government Printing Press, Vadodara, for publication in the gazette as required under sub-section (2) of Section 20 of the Act and the Manager of the Ahmedabad District Co-operative Bank Limited, Ahmedabad was informed not to permit the petitioner-Society to operate accounts and all the accounts of the petitioner-Society were ordered to be freezed.

2.3. However, for about four years, the above order was not challenged either by the Society or by any aggrieved persons, but, an appeal came to be filed by the Society before the Additional Registrar, Co-operative Societies, Gujarat State, Gandhinagar, challenging the order dated 2.11.1996 passed by the District Registrar under Section 20 of the Act on various grounds. Inter alia, it was contended that, before exercising powers under Section 20 of the Act, no notice was issued to the petitioner-Society and, at no point of time, the report of audit and inspection was brought to the notice of the Society and, therefore, the order was in violation of the principles of natural justice and deserved to be quashed and set aside. It was submitted before the Appellate Authority that no procedure as required under Section 107 of the Act was followed before exercising powers under Section 20 of the Act and, therefore, the whole exercise undertaken by the Competent Authority was illegal and contrary to law and deserved to be set at naught. It was also contended that cancellation of registration of the Society is a harsh action and it was incumbent upon the Authority to explore a less drastic remedy under Sections 86 and 87 of the Act and in a given case power can be exercised under Section 93 of the Act.

2.4. Since respondent Nos. 4 to 26 herein were not before the Appellate Authority, an application was preferred by them for impleading them as parties in the appeal before the Additional Registrar, Co-operative Societies, respondent No.2 herein, on the ground that they were necessary and proper parties. However, the Additional Registrar, Co-operative Societies, respondent No.2 herein, by order dated 22.3.2000, dismissed the application for impleadment preferred by respondent Nos. 4 to 26 herein.

2.5. Being aggrieved by the order dated 22.3.2000 passed by the Additional Registrar, Co-operative Societies, respondent No.2 herein in the application for impleadment, respondent Nos. 4 to 26 herein filed Revision Application No.51 of 2000 and, during pendency of the said revision application, the Additional Registrar [Appeals] passed final order on 14.6.2000 by which Appeal No.1 of 2000 filed by the Society came to be allowed and order dated 2.11.1996 passed by the District Registrar of cancellation of registration of the petitioner-Society came to be quashed and set aside.

2.6. Thus, finally, respondent Nos. 4 to 26 herein filed Revision Application No.138 of 2000 under Section 155 of the Act contending, inter alia, that though earlier revision application was pending against the order of the Additional Registrar [Appeals] dismissing application for impleadment preferred by the revisionists, final order came to be passed by the Additional Registrar [Appeals] contrary to the provisions of law though the record of the case was sent by the Revisional Authority pursuant to the request made by the Additional Registrar [Appeals] for administrative purpose. It was also contended that the revisionists were vitally affected and without there being any justifiable reasons against the finding of facts arrived at by the Competent Authority after careful perusal of the record, the Appellate Authority on extraneous considerations quashed and set aside the order of the District Registrar on the grounds that the Society was functioning in accordance with the provisions of the Act, Rules, Regulations and Bye-laws; the Society had entered into agreement with the original owners of the land and the procedure was being followed for seeking exemption under section 20 of the ulc act, but the above grounds weighed with the Appellate Authority have no legal basis and the appeal was filed after lapse of four years of passing of the order by the District Registrar and the Society had virtually become functus-officio and the Appellate Authority ought not to have disturbed the order of the Competent Authority.

2.7. The Revisional Authority took into consideration the record of the case, the report of Special Auditor and the findings recorded by the District Registrar for exercise of powers under Section 20 of the Act and the record pertaining to the contribution of share amount of the members and audited accounts and came to the conclusion that the Society had failed to commence its business within reasonable time of its registration and it had ceased to function and, therefore, the order dated 2.11.1996 passed by the District Registrar in exercise of powers under Section 20 of the Act was just, proper and legal. Accordingly, by order dated 29.8.2000, the Revisional Authority allowed Revision Application No.138 of 2000 and quashed and set aside the order dated 14.6.2000 passed by the Appellate Authority.

2.8. It is to be noted that the order dated 2.11.1996 passed by the District Registrar came to be published in the Gujarat Government Gazette on 3.2.2000 as required under sub-section (2) of Section 20 of the Act.

2.9. In the context of the above-mentioned facts, the petitioners challenged the order dated 29.8.2000 passed by respondent No.1 and the order dated 2.11.1996 passed by respondent No.3 on various grounds as mentioned in the memorandum of petition and argued by the learned counsel appearing for the petitioners.

3. After initial challenge to the orders impugned on the ground of bona fide of the Authorities to exercise powers under Section 20 of the Act and justification for arriving at the finding that the petitioner-Society had not commenced its business within reasonable time, by way of an amendment dated 30.4.2001, vires of Section 20 of the Act came to be challenged on the ground that exercise of powers under Sections 86 and 87 of the Act is mandatory of holding an inquiry or carrying out audit of the Society and also powers under Sections 107 and 108 are to be exercised and, if not so, Section 20 of the Act is ultra vires the Constitution of India.

3.1. However, at the relevant point of time, when the matter was listed before the Division Bench on 29.6.2006, this Court [Coram: R.S. Garg and M.R.Shah, JJ.] passed the following order:

"It is to be noted that the vires of particular provision, especially Section 20 of the Gujarat Co-operative Societies Act, was subjected to this Writ Application and during pendency of this Writ Application, the petitioners could settle the matter with some of the persons. Almost after six years, when the matter came up for final hearing, Mr. J. R. Nanavati, learned Senior Counsel, with Mr.Ajay R.Mehta, learned Counsel for the petitioners, submits that he is not pressing the vires in the matter. He, however, submits that challenge to the order passed by the State still survives. We do not know, for what the vires of particular provision was challenged and why that challenge is being withdrawn. Would we be justified in presuming that to avoid one Bench, the vires was challenged and to avoid yet another Bench, the challenge to the vires is withdrawn or the vires had been challenged simply to create a larger issue to obtain small reliefs.

As the challenge to vires is being withdrawn, the Office is directed to place the matter before the appropriate Bench." [Emphasis supplied]

3.2. Therefore, the matter was again listed before this Court and, with the consent of the parties, this matter is taken up for final hearing.

4. Mr. J.R. Nanavati, learned Senior Counsel appearing for the petitioners, at the outset, has submitted that, unless and until powers under Section 107 read with Section 108 of the Act are exercised, powers under Section 20 of the Act are neither attracted nor can be resorted to even in the case of the Society for alleged ground of non-commencing the business within reasonable time of its registration or that it has ceased to function. Mr. J.R. Nanavati has taken this Court to various provisions of Chapter X of the Act and submitted that, considering the scheme of the Act, before exercising powers under Section 20 of the Act in juxtaposition to the provisions of Sections 107 and 108 of the Act have also to be read with, since under Section 107 of the Act an order can be passed for winding up of the Society as an interim measure and final order under Section 108 of the Act for appointment of Liquidator can be passed. Under Section 109 of the Act, the Society or its Managing Committee can file an appeal and, if the appeal fails, and when the Liquidator takes over the charge, powers can be exercised by the Liquidator under Section 110 of the Act and, thereafter, an audit of liquidation account under Section 113 of the Act can be carried out and proceeding of liquidation can be terminated under Section 114 of the Act. These proceedings can be placed before the general body of the Society and, after termination of such proceeding, only powers can be exercised under Section 20 of the Act. It is, therefore, submitted that the above procedure under Chapter X of the Act is like an adjudication and Section 20 is making and passing of a decree. The above procedure is not followed and straightway the impugned order is passed by the District Registrar.

4.2. Inter alia, it is submitted that exercise of power under Section 20 of the Act is a drastic remedy and, therefore, it is necessary that, before taking recourse to such harsh action, lesser drastic remedy and other curative measures, as provided under the Act, namely, holding an inquiry under Section 86, inspection under Section 87 and, as a last resort, after exercise of powers under Section 107 onwards, only cancellation of registration of the Society can take place and not otherwise.

4.3. Mr. J.R. Nanavati, learned Senior Counsel appearing for the petitioners has taken this Court to the provisions of Sections 107 and 108 of the Act and Section 20 of the Act and also the provisions preceding to section 20 of the Act pertaining to amalgamation, etc. of the Society.

4.4. Mr. J.R. Nanavati assailed the impugned order of the District Registrar also on merits and submitted that the Society was carrying out its functions since last 32 years when the petition was filed and agreement to sell was entered into with respondent Nos. 4 to 26 herein and for specific performance of the agreement, a suit was also filed for the land bearing Revenue Survey No.502/A, Vejalpur, admeasuring about 94380 sq.yards. Since an application for exemption under Section 20 of the Act was pending as preferred by the original land owners and their representatives, no deed or conveyance was drawn and, therefore, it cannot be said to be a Society who failed to carry out or commence the business within the reasonable time from the date of its registration. It is submitted that even the audit report 21.8.1995 recorded the fact of entering into agreement by the Society for purchase of land and if any lacuna in functioning of the Society was noticed by the Auditor, such lacuna could have been brought to the notice of the Society so as to comply with or remove such lacuna. It is further submitted that even notice given by the District Registrar in Gujarat Samachar on 5.6.1996 also referred to the action to be taken against the Society under Section 107 of the Act and even if notice to be treated as joint notice for exercise of powers under Section 107 and/or Section 20 of the Act, then also, no proper procedure was followed by the Authority before exercising powers, which ultimately resulted into cancellation of registration of the Society. Even in the impugned order dated 2.11.1996, the Competent Authority had no material to rely upon and, only on the basis of the so-called report of Special Auditor and publication of notice in the newspaper, powers have been exercised, which entailed drastic consequences and adversity affecting the petitioner-Society.

4.5. It is submitted that respondent Nos. 4 to 26 herein had no locus to prefer application for impleadment of parties in appeal/revision application No. 1 of 2000 preferred by the Society in as much as they had nothing to do with cancellation of registration of the Society and, therefore, the order dated 22-3-2000 was just and proper and, after hearing the parties, the final order dated 14-6-2000 was passed by the Additional Registrar [Appeals] which ought not to have been interfered with by the Revisional Authority in Revision Application No. 138 of 2008 without there being any justification. It is submitted that as and when the petitioners came to know about passing of the order dated 2.11.1996 by the District Registrar in exercise of powers under Section 20 of the Act, after obtaining certified copy of the order, they had immediately preferred appeal and, therefore, when no time limit is prescribed for filing appeal, it was within time and rightly entertained by the Appellate Authority after considering the relevant facts on record. It is submitted that the Appellate Authority found that no circumstance was warranted for exercising drastic power under Section 20 of the Act by the Authority.

4.6. Mr. J.R. Nanavati, learned Senior Counsel appearing for the petitioners also made a reference to a commentary Administration Law by Prof. Wade and submitted that right to appeal being inherent right under the Act to an aggrieved person, exercise of powers under Articles 226 and 227 of the Constitution of India cannot be refused by the writ court on some trivial ground of locus or otherwise. Therefore, according to Mr. J.R. Nanavati, learned Senior Counsel appearing for the petitioners, the Society on its inception enrolled 114 members who contributed share amount of Rs. 19 lakhs and the houses could not be constructed for the members because of undue delay in processing application under section 20 of the ulc act for exemption by the Authority, the findings recorded by the Competent Authority and the Revisional Authority about non-commencement of business by the petitioner-Society within reasonable time of its registration are unreasonable, arbitrary and the impugned orders deserve to be quashed and set aside.

4.7. In support of his submission, Mr. J. R. Nanavati, learned Senior Counsel appearing for the petitioners has placed reliance on the decision of Apex Court in the case of Garikapati Veeraya v. N. Subbiah Choudhry & Others, reported in AIR 1957 SC 540.

5. In counter, Mr. K.G. Vakharia, learned Senior Counsel appearing for private respondents, at the outset, has submitted that the petitioners have no locus to file the present petition and once order under Section 20 of the Act is passed by the Competent Authority the Society being a corporate body and an entity of its own as per Section 37 of the Act ceased to be a Society and when there is no registration of the Society, it cannot be termed as a body corporate and, being an unregistered body having no common seal with perpetual succession, no function can be carried out under the Act and, therefore, challenge made by the so-called member of the Society in the present petition to the impugned orders deserves to be rejected on this ground alone.

5.1. It is further submitted that the publication of order under Section 20 of the Act as required under sub-section (2) thereof, is brought on record of the case by filing further affidavit on behalf of respondent No. 16, which revealed that, in Gujarat Government Gazette on 3.2.2000, the order dated 2.11.1996 cancelling registration of the petitioner-Society in exercise of powers under Section 20 of the Act came to be published and, therefore, when the petitioner-Society has lost its nature and character as a Society as required under Section 37 of the Act, this petition deserves to be rejected. It is humbly submitted that the above issue is to be decided as a preliminary issue.

5.2. At the same time, Mr. K.G. Vakharia, learned Senior Counsel appearing for private respondents, has submitted that there is no merit in any of the contentions raised by the learned counsel for the petitioners in as much as Section 20 and Section 107 of the Act are different and operate in their distinct area and circumstances. That exercise of powers under Section 20 of the Act is independent of Section 107 of the Act. There is no pre-condition or pre-requisition that, before exercise of powers under Section 20 of the Act, the Authority must take recourse to either Section 107 or 108 of the Act, etc. Learned counsel for the respondents has taken this Court to the provisions of the above Sections and purpose and requirement of such Sections before exercising powers and submitted that both the powers, namely, under Section 20 as well as under Sections 107 and 108, operate in different arena and, therefore, the contention of the learned counsel for the petitioners deserves to be rejected to that extent. It is further submitted that there is no straight-jacket formula as such, before exercising powers under Section 20 of the Act, the Authority must take recourse to lesser drastic remedy of undertaking audit under Section 86 or carrying out inspection of the books of account and to take recourse only in a rare case to section 107 and, thereafter, section 120 of the Act.

5.3. It is further submitted that considering the audit report, books of account and balance in the bank account for about 26 years from the date of registration, it is apparent that no business was commenced as required under the Act and the address of registration of the Society was in a different area and the land was purchased altogether in a different area of the city. Having registered with Odhav and Rakhial as area of operation, the land was purchased in Vejalpur that too was subject matter of excess land to be declared under the ULC Act and a Society registered under the Act could not have entered into agreement for purchase of land which had no clear title and was not free from encumbrance. On the contrary, the land was to be declared as an excess land on an application for exemption not being granted by the Authority. Therefore, the above-mentioned factors will go to show that the petitioner-Society had not commenced any business and therefore, powers exercised by the Competent Authority under Section 20 of the Act and upheld by the Revisional Authority under Section 155 of the Act do not deserve any interference by this Court.

5.4. Mr. K.G. Vakharia, learned Senior Counsel appearing for private respondents, has placed reliance on the following decisions in support of his submissions about exercise of powers under Articles 226 and 227 of the Constitution of India and also about the locus of the petitioners under the Act.

[i] 1979 GLR 801 : [Ramji Mandir vs. Narsinhnagar]

[ii] 2002 (1) GLR 426 : AIR 2002 (NOC 266 (Guj) [Shivalaya Co-op.Hsg.Society Limited v. Shantaben]

[iii] 1996 (3) GLR 522 : [Jayantilal H. Shah v. Hemkunverben D. Dave]

[iv] 2002 (3) GLR 2521 : AIR 2003 (NOC) 118 (Guj) [Ashokkumar J. Pandya v. Suyog Co-op. Hsg. Society Limited and others]

[v] 1978 (1) SCC 405 : AIR 1978 SC 851 [Mohinder Singh Gill v. Chief Election Commissioner]

[vi] 2002 (1) SCC 319 : AIR 2002 SC 110 [Ouseph Mathai and others v. M. Abdul Khadir]

[vii] 1971 SC [Guj] 156 : [C.D. Desai v. C.P. Patel]

[viii] 1966 SC 828 : [Venkateswara Rao v. Government of Andhra Pradesh]

(ix) 2003 (3) SCC 524 : AIR 2003 SC 1561 [Sadhana Lodh v. National Insurance Company Limited].

6. Ms. K.A. Mehta, learned Senior Counsel appearing for some of private respondents, has supported the arguments of Mr. K.G. Vakharia, learned Senior Counsel, and has apprised the fact that the suit, which was filed by the Society for specific performance, has been withdrawn and Rs.19 lakhs collected by the Society towards share-holding were not deposited in the bank account. She submitted that the Society was registered for construction of residential houses and not for acquiring land and, therefore, the impugned orders do not deserve any interference. In addition, she has also placed reliance on the following decisions:

[i] 2002 (9) SCC 509 : [Vikram Singh Junior High School v. District Magistrate [Fin and Rev] and others] [ii] 2000(3) GLR 2505: [Ahmedabad Municipal Corporation v. Vijay Owners Association]

7. Ms. Sangeeta Vishen, learned Assistant Government Pleader appearing for the State, has defended exercise of powers under Section 20 of the Act by the Competent Authority and submitted that the Special Auditor had considered the accounts for the previous year of 1996 and audit was carried out for 1.7.1991 to 30.6.1994 and, after following due procedure of issuance of individual notices and also publishing joint notice in Gujarat Samachar on 5.6.1996, the affected persons were asked to comply with necessary requirements under the Act within one month, failing which, powers would be exercised either under Section 107 or under Section 20 of the Act. Therefore, it cannot be said that there was any breach of the provisions of natural justice since the petitioners were given sufficient opportunity but they failed to avail it and, therefore, the impugned orders deserve to be sustained. She has referred to various provisions of the Act and submitted that Section 20 and Section 107 are totally different and they are not interlinked in any manner. Section 20 is independent to Section 107 of the Act and events, which have taken place after 1995 cannot be taken into consideration. She adopts and relies on the judgments already cited by the learned counsels appearing for the private respondent on the question of exercise of powers by this Court under Articles 226 and 227 of the Constitution of India.

8. In rejoinder, Mr. J.R. Nanavati, learned Senior Counsel appearing for the petitioners has invited my attention to various sub-sections of Section 107 in Chapter X of the Act and Section 20 of the Act and tried to strike a similarity between certain wordings of both the sections and submitted that the recording of finding by the Special Auditor also revealed functioning of the Society and entering into a banakhat by the Society with the landlords whose land was subject matter under the ULC Act, was permissible under the law and, therefore, according to the learned counsel for the petitioners, exercise of powers under Section 20 of the Act by the Competent Authority is illegal and deserves to be quashed and set aside.

9. In sur-rejoinder, Mr. K.G. Vakharia, learned Senior Counsel appearing for private respondents, has highlighted the provisions of Section 107[C] [i][ii] and Section 20(1) of the Act and submitted that, had there been any intention of the Legislature, it would have done so in no uncertain terms, but what is reflected in sub-section (1) is that it considers various eventualities for which powers of cancellation of registration can be exercised, otherwise, there would not have been or a disjunctive, after if its affairs are wound up.

10. Having heard the learned counsels appearing for the parties and on perusal of the record including the pleadings and the impugned orders and in view order the preliminary objection raised by the learned counsel for the respondents about locus of the petitioners to file this petition under Articles 226 and 227 of the Constitution of India, I deem it necessary to deal with the above contention at the outset.

Re: Preliminary Contention:

10.1. At the outset, distinction canvassed by the learned counsel for the respondents on Section 20 and Section 37 of the Act needs to be examined in view of the language employed by the Legislature.

10.2. Section 20 of the Act reads as under:

"20. Cancellation of Registration:

[1] The Registrar shall make an order cancelling the registration of a society if it transfer the whole of its assets and liabilities to another society, or amalgamates with another society, or divides itself into two or more societies, or if its affairs are wound up or it has not commenced business within a reasonable time of its registered or has ceased to function.

[2] An order made under sub-section (1) shall be published in the Official Gazette.

[3] The society shall, from the date of such order of cancellation, be deemed to be dissolved and shall cease to exist as a corporate body.

Section 20 is placed under Chapter II with heading Registrar and registration and section 20 is pertaining to cancellation of registration. sub-section (1) of Section 20 empowers the Registrar to make an order cancelling registration of the Society, if the Society [i] transfers the whole of its assets and liabilities to another society; or [ii] amalgamates with another society; or [iii] divides itself into two or more societies; or [iv] the Societys affairs are wound up; or [v] has not commenced business within a reasonable time of its registration; or [vi] has ceased to function.

10.3. sub-section (2) of Section 20 of the Act mandates that an order made under subsection (1) shall be published in the Official Gazette. Sub-section (3) of Section 20 of the Act provides for consequences and after passing of an order under sub-sections (1) and (2) for cancellation of registration of the Society and on publication of the said order in the official gazette, the Society shall, from the date of such order of cancellation of registration, be deemed to be dissolved and shall cease to exist as a corporate body. Thus, existence of a Society as a corporate body upon passing an order of cancellation of registration under sub-section (1) and publication of such order under sub-section (2) of Section 20 comes to an end.

10.4. Section 37 is found in Chapter IV with heading Incorporation, Duties and Privileges of Societies and Section 37 mentions about legal status of the Society as a body corporate. As per this Section, upon registration under the Act, a Society shall be a body corporate by the name under which it is registered, with perpetual succession and a common seal and assumes powers to acquire, hold and dispose of property, to enter into contracts, to institute and defend suits and other legal proceeding, and to do all such things as are necessary for the purpose for which it is constituted.

10.5. Thus, consequence or result of registration is akin to consequence of registration of a Company under the Companies Act, 1956.

10.6. A Society registered under the Act acquires a statutory status under the Act. The Society does not become a living being but a corporate body and performs its statutory functions through its Managing Committee and office bearers in accordance with law. Therefore, when a Society ceases to be a corporate body upon passing of an order under Section 20(1) of the Act, whether such Society, who is no more a corporate body, and/or its office bearer or member can challenge such order is to be considered in the present petition while exercising powers under Articles 226 and 227 of the Constitution of India.

10.7. It may be true that, upon passing of an order under sub-section (1) and on publication of such order under sub-section (2) of Section 20 of the Act, the Society ceases to be a corporate body from the date of such order of cancellation of registration, but a person aggrieved by such order may be an office bearer or member, can always challenge such order by invoking jurisdiction of the Court under Article 226 of the Constitution of India in case if the remedy available under the Statute is exhausted and the grievance remains unsolved.

10.8. Section 155 of the Act confers power upon the State Government and the Registrar to call for proceeding of sub-ordinate officers and to pass orders thereon. Therefore, any order of the sub-ordinate officer being that of the District Registrar under Section 20 of the Act is subject to above power and an aggrieved person can certainly approach the State Government for redressal of grievance. Existence of the Society as a corporate body whether ceases is relevant for the purpose of the Act and the Rules and is not a condition precedent or a pre-requisite to adjudicate legality and validity of the order of the District Registrar under Section 20 of the Act and, on that ground, an aggrieved person cannot be rendered remediless. The preliminary contention raised by the learned counsel for the respondents, if accepted, will run counter to the well-known principle ubi-jus-ibi-remedium - wherever there is a right and/or an injury - there has to be a remedy. Therefore, the preliminary contention raised by the learned counsel for the respondents will not detain this Court any further. However, this Court has decided to deal with all the contentions raised on law as well as on facts on their own merit and considering the scope of such examination under Articles 226 and 227 of the Constitution of India as per the decisions relied upon by the counsel appearing for the parties hereinabove.

11. Before adverting to the rival contentions raised by the learned counsel for both the parties on merits, the following factual aspects as to function of the Society and the bank deposits of the Society noticed on perusal of the record, deserve mention:

11.1. As per the then prevailing rules, regulations and norms, a society had a definite geographical area of operation. In the case of the petitioner, the petitioner-society had contracted to purchase lands of survey Nos. 429 and 449 of Moje: Odhav by way of banakhat. The petitioner-society had its Registered Office at Saraspur within the Ahmedabad City limit and at that point of time had carried out its activities in the Saraspur Area. According to Section 13 of the Act and Rule 5 of the Rules, any society wishing to change the geographical area of operation has to apply to the appropriate authority for the same and the appropriate authority may after considering the application, take a decision in the matter. In the year 1961 the city limit of Ahmedabad and its suburbs was very small and Odhav was a taluka place as was Vejalpur. The petitioner, which was granted Odhav, Ahmedabad and its suburbs as the area of operation, could never have purchased any property or could also not have contracted to purchase any property in any other area. Thus, the petitioner having claimed to have purchased the land in the Vejalpur area could not have done so without prior permission of the appropriate authority under Section 13 of the Act read with Rule 5 of the Rules. On a bare perusal of the record, it appears that the petitioner had not made any application. Thus, for the activity, conduct and operation of the society, the society could only have operation within the Ahmedabad city and Odhav area.

11.2. In the year 1971 and 1981 banakhats were entered into to purchase land of survey N.O.502/A of Moje: Vegalpur. This was not permissible and could not have been done. Vide the audit and accounts of the petitioner for the year ended 30th June 1994, cash balance of Rs.7.50 is shown in the balance-sheet. These are the audited accounts duly verified by the department. This itself would go to show that the society has not functioned according to its objects and rather not functioned at all looking to the period between 1967 and 30th June 1994, which is a period of about 26 years.

Re: Contention as to procedural irregularity - Whether power be exercised under Section 107 read with Section 108 first, before exercising power under Section 20 of

12. Section 107 and Section 108 are pertaining to winding up of the Society and appointment of Liquidator and both the Sections are incorporated under Chapter X with heading Liquidation. Sections 107 108 of the Act read as under:

107. Winding up:-1. If the Registrar-

[a] after an inquiry has been held under section 86, or an inspection has been made under section 87, or on the report of the auditor auditing the accounts of the society, or

[b] on receipt of an application made upon a resolution carried by three-fourths of the members of a society present at a special general meeting called for the purpose, or

[c] of his own motion, in the case of a society which-

[i] has not commenced working, or

[ii] has ceased working, or [iii] possesses shares of members deposits not exceeding five hundred rupees, or [iv] has ceased to comply with any conditions as to registration and management in this Act or the rules or the bye-laws, or

[v] has failed to comply with any directions issued under sub-section (1) of section 160 or such directions as modified under sub-section (2) of that section.

is of the opinion that a society ought to be wound up, he may make an interim order directing it to be wound up.

2. Where an interim order is made on a ground specified in clause (a) or sub-clause (iv) of clause (c) of sub-section (1) a copy thereof shall be communicated, in the prescribed manner, to the society calling upon it to submit its explanation to the Registrar within a month from the date of the issue of such order.

3. The Registrar, after giving an opportunity to the society of being heard, shall make a final order, vacating or confirming the interim order.

108. Appointment of Liquidator.

1. When an interim or final order is made under section 107 for the winding up of a society, the Registrar may, in accordance with the rules appoint a person to be the liquidator of the society, and fix his remuneration.

2. Where an interim order is made the officers of the society shall hand over to the liquidator the custody and control of all the property, effects and actionable claims to which the society is or appears to be entitled, and of all books, records and other documents pertaining to the business of the society and, shall have no access to any of them.

3. When a final order is made confirming the interim order, the officers of the society, [a] shall hand over to the liquidator the custody and control of any property, effects and actionable claims and any books, records, and other documents pertaining to the business of the society, which for any reason are not handed over to the liquidator under sub-section (2) at the time when an interim order was made. [b] shall vacate their offices and while winding up order remains in force, the general body of the society shall not exercise any powers.

4. The liquidator shall, subject to the general control of the Registry, exercise all or any of the powers mentioned in section 110. The Registrar may remove him from his office and appoint another in his place, without assigning any reason.

5. The whole of the assets of the society shall on the appointment of the liquidator vest in him and notwithstanding anything contained in any law for the time being in force, if any immovable property is held by him on behalf of the society, the title over the land shall be complete as soon as the mutation of the name of his office is effected, and no Court shall question the title on the ground of dispossession, want of possession or physical delivery of possession.

6. In the event of the interim order being vacated, the liquidator shall hand over the property, effects, actionable claims, books, records and other documents of the society to the officers who had delivered the same to him. The acts done, and the proceedings taken by the liquidator, shall be binding on the society, and such proceedings shall, after the interim order has been vacated under section 107 be continued by the officers of the society.

Section 109 is about appeal against the order of winding up and Section 110 confers power upon the Liquidator subject to the Rules and general supervision, control and direction of the Registrar. Section 111 is about effect of order of winding up. Section 112 provides bar of suit in winding up and dissolution matters. Section 113 is about audit of liquidators accounts and Section 114 is for termination of liquidation proceedings.

12.1. Thus, Section 107 if perused closely, it is divided into two parts. Firstly, clauses [a] and [b] of sub-section (1) of Section 107 empower the Registrar to pass an order of winding up of the Society after an inquiry under Section 86 or an inspection under Section 87 or on the report of the auditor auditing the accounts of the society and on formation of an opinion by the Registrar that it is necessary to wind up the Society or on receipt of an application made upon a resolution carried by three-fourths of the members of the society present at a special general meeting called for the purpose. Secondly, on his own motion, the Registrar can pass an order of winding up in case of a society which [i] has not commenced working, or [ii] has ceased working, or [iii] possesses shares of members deposits not exceeding five hundred rupees, or [iv] has ceased to comply with any conditions as to registration and management in this Act or the Rules or the bye-laws, or [v] has failed to comply with any directions issued under sub-section (1) of section 160 or such directions as modified under sub-section (2) of that section.

12.2. Keeping in mind the above provisions, the contention of Mr. J.R. Nanavati, learned Senior Counsel appearing for the petitioners, that, in the facts of this case, the Special Auditor had submitted audit report and, therefore, at the most, the Registrar could have taken action under clause (a) of sub-section (1) of Section 107 and thereafter only could have exercised power or alternatively if the Society had not commenced working, then action could have been taken suo motu on his own motion as per sub-clauses [i] and [ii] of clause [c] of sub-section (1) of Section 107 of the Act, needs to be examined.

12.3. If the above contention based on Section 107 of the Act is examined in juxtaposition to Section 20 about power of the Registrar to cancel registration of the Society, as stated earlier, Section 20 envisages six different eventualities, namely, when the Society [i] transfers the whole of its assets and liabilities to another society; or [ii] amalgamates with another society; or [iii] divides itself into two or more societies; or [iv] the Societys affairs are wound up; or [v] has not commenced business within a reasonable time of its registration; or [vi] has ceased to function, whereby the Registrar is empowered under Section 20 to make an order cancelling registration of the Society. All the above six eventualities lead to separate cause of action and unconnected in any manner. Disjunctive or employed in sub-section (1) of Section 20 gives independent power to the Registrar to make an order of cancellation of registration if the Registrar is satisfied that any of the above grounds exists irrespective or independent of the grounds enumerated in Section 107 of the Act. If both the Sections are perused closely, even the wordings of clause (c) of sub-section (1) of Section 107 and sub-section (1) of Section 20 are different. sub-section (1) of Section 20 provides for cancellation of registration in case of a Society not commenced business within reasonable time of its registration or has ceased to function, while section 107(1)(c) empowers the Registrar, on his own motion, to make an interim order in the case of a Society, which [i] has not commenced working; or [ii] has ceasedworking;and other two eventualities to which, we are not concerned. Therefore, the above wording not commencedbusiness within reasonable timeof its registration or has ceased to function as found in sub-section (1) of Section 20 is different than the wordingnot commenced working or ceased workingas found in section 107(1)(c) of Chapter X of the Act pertaining to registration and operates in its own field. In a given case, it may be possible that if the affairs of the society are wound up, cancellation of registration may follow, but, it does not mean that, before exercising powers under sub-section (1) of Section 20, the Authority, namely, the Registrar has to follow the procedure as provided in section 107(1)(c) of Chapter X of the Act. clause (a) of sub-section (1) of Section 107 in a given circumstance may lead to passing an order of winding up but if the Registrar, on being satisfied independently on the basis of report and after issuance of notice, as has been done in this case, and following the principles of natural justice of hearing the Society affected, comes to the conclusion that the Society after registration has not commenced business within reasonable time or has ceased to function, without following the procedure of winding up as envisaged under Chapter X of the Act, cancellation of registration of the Society can be ordered.

12.4. Therefore, the contention of Mr. J.R. Nanavati, learned Senior Counsel appearing for the petitioners, that before exercising powers under Section 20 of the Act, it is prerequisite to follow procedure as laid down under Section 107 of the Act and powers under Section 20 of the Act can be exercised only after following procedure of liquidation, has no merit and cannot be accepted. Both the above sections, namely, Section 20 and Section 107 are mutually exclusive and independent to each other.

Re: Contention as to locus of respondent Nos. 4 to 26 herein to file revision against the order of the Appellate Authority.

13. This issue is no longer res-integra. As held by the Apex Court in the case of C.D. Desai v. C.R Patel, AIR 1971 Gujarat 156, it is also not essential to attract revisional jurisdiction under Section 155 of the Act that the decision or order sought to be revised must be one affecting rights or liabilities of parties. In paragraph 4, it is held by the Apex Court as under:

"It is a power of a residuary nature empowering the State Government and the Registrar to revise decisions or orders which are not otherwise appealable to the Co-operative Tribunal under Section 150 and this is a necessary power for it is eminently desirable that against orders or decisions which may be passed by the subordinate officers in respect of various matters which are entrusted to them under the Act, there must be a revising authority which can rectify errors arising from bona fide mistake, incompetence, inefficiency or even fraud or corruption or else the object of entrustment of such functions might be frustrated.

13.1. Considering the above, it is held that under Section 155 of the Act any aggrieved person can challenge the order.

Re: Contention as to resorting to lesser drastic remedy.

14. Whether or not to resort to lesser drastic remedy, there cannot be any straight-jacket formula and it depends upon the facts and circumstances of each case - whether holding of an inquiry as envisaged under Section 86 or conducting an inspection under Section 87 or report of the Auditor is to be relied upon, or not. In this case, the facts stated in paragraphs 2 and 11 of this order justify exercise of power under Section 20 of the Act. The Society had completely deviated from its statutory obligations and registration just remained on the paper having become functus officio.

Re: Contention regarding bona fide of the Authorities to exercise powers under Section 20.

15. If the facts of the present case are seen, the Society was given a show cause notice, but no reply was given. Later on, a public notice was also given by the District Registrar in widely circulated vernacular newspaper, namely, Gujarat Samachar on 5.6.1996 making it clear that, if oral or written reply was not submitted within one month from the date of advertisement of the above notice, registration of the Society would be cancelled and powers under Section 20 or under Section 107 of the Act will be exercised but, in spite of the above procedure having been followed by the Authority, no reply was given, nor any representation was made either by the Society or by the office bearer or any member of the Society. Thereafter, the District Registrar perused the report of Special Auditor and bank accounts of the Society and found that, after its registration in the year 1967, for about 26 years, the Society had not commenced business of construction of houses and even an agreement was entered into with the private respondents herein for acquiring and development of land, which was subject matter of ULC proceeding, which cannot be said to be irrelevant consideration by the Registrar before passing the order. When the Appellate Authority quashed and set aside the order of the District Registrar, upon revision being filed by the revisionists, by assigning elaborate reasons, the Revisional Authority quashed and set aside the appellate order and upheld the original order passed by the District Registrar under Section 20 of the Act, which does not deserve any interference by this Honourable Court in exercise of power under Articles 226 and 227 of the Constitution of India.

15.1. It is to be noted that the Appellate Authority has shown undue haste before passing the order by which the order of the District Registrar was quashed and set aside, particularly when Revision Application No.51 of 2000 filed by respondent Nos. 4 to 26 herein against rejection of application for impleadment of parties was pending and, during pendency of Revision Application No.51 of 2000, record of the subject matter was sent by the Revisional Authority to the Appellate Authority for administrative purpose and immediately the order was passed by the Appellate Authority in the appeal which was filed after four years delay challenging the order dated 2.11.1996 of the District Registrar. Therefore, according to this Court, there is no infirmity either in the order dated 29.8.2000 passed by respondent No.1 or in the order dated 2.11.1996 passed by respondent No.3, which can be said to be contrary to law or having any jurisdictional error, which deserve interference by this Honourable Court in exercise of power under Articles 226 and 227 of the Constitution of India.

16. As a result of foregoing discussion, this petition is rejected. Rule is discharged with no order as to costs.

Petition dismissed.