Anant S. Dave, A.C.J.:—
Order in Letters Patent Appeal
1. Heard Mr. B.S. Patel, learned advocate for the appellant Mr. R.H. Ruparelia, learned advocate for the respondent has filed leave note.
2. In the context of challenge to order passed by learned Single Judge vis-a-vis interpretation of certain proviso 2 un-numbered proviso to sub-section (1) of Section 36 of Gujarat Cooperatives Act, 1961 and in the facts of this case, whether communication was addressed by Registrar by disapproval of expulsion of appellant/original respondent no. 3 whether communicated within three months of outer limit so provided under proviso as above. Reliance is placed on the decision in the case Balasinor Nagrik Cooperative Bank ltd. v. Babubhai Shankerlal pandya Reported in 1987 (1) GLH 423, unreported decision in Special Civil Application No. 1921 of 2008 in Sachin Udyognagar Sahakari Mandli Ltd. v. State of Gujarat and in the case of Jentibhai Chitabhai Patel v. State of Gujarat reported in 2007 (4) GLR 2866 in the context of challenge based on requirement of assigning reasons upon expiry of period of 90 days as envisaged by the 2 proviso, the Registrar is not required to assign reasons when he was not empowered to pass an order beyond the stipulated period. After interpreting provisions of Section 36 of the Act in paragraphs 13 to 18 learned Judge as reiterated as under:
“13. The contention raised on behalf of the petitioner may be considered from a slightly different angel. If the matter is examined in context of the legislative scheme it becomes apparent that the provision cannot be read so as to provide for assigning of reasons by the Registrar when the approval is conveyed within the stipulated period of 90 days, while laying down that in the event period of 90 days has expired, as envisaged by the second proviso, the Registrar is not required to assign reasons because he is not empowered to pass an order. That cannot be the legislative intent. The legislature could not have provided for a situation where an authority should assign reasons when it passes an order but is not required to do so when the prescribed period is over and the resolution passed by the society becomes effective even though the Authority does not pass an order. The submission in relation to right of appeal, in this context, cannot support the stand of the petitioner. The appeal filed against a deemed approval on expiry of period of 90 days would be in the same position before the Appellate Authority as in a case where approval is granted without reasons when made within the period of 90 days. The legislature has not provided that there cannot be an appeal against such deemed approval. Thus there cannot be two different criteria for examining the validity of an order and a non-order. Both stand in the same footing. An interpretation which makes the provision workable in both eventualities should be favoured to an interpretation which breaks down in one of the eventualities, rendering a part of the provision redundant.
14. However, there is one caveat. Non assigning reasons per se would not vitiate an order of approval But the order of approval must, at the same time, reflect that there was an application of mind by the Authority to the material available on record, namely, the resolution passed by the Society, the basis for passing such a resolution, and the explanation of the member concerned as to why such approval should not be granted. This is having regard to the distinction already noted herein before between the validity of the resolution and effectiveness of the resolution.
15. But in a case where the Registrar records his disapproval, he has to assign reasons, howsoever brief. An order of disapproval would result in a situation when a valid resolution made by the Society might have to be taken up for reconsideration by the Society. Therefore, the Society must know as to why the re9slutionis not to become effective. This is also again subject to the statutory period of 90 days within which period Registrar can convey his disapproval. But on his failure to act within the prior of 90 days during which the valid resolution has been kept in suspension, the resolution becomes effective and is required to be implemented, the Registrar having become functus officio as laid down by the Apex Court.
16. The object of the provision has to be borne in mind. The entire legislative scheme goes to show that the Co-operative Society is to function democratically and the internal democracy of a society, including resolutions passed in accordance with the Act, the Rules, and the Bye-laws have to be respected and implemented. The underlying idea of Sec. 36 of the Act is to give precedence to the collective rights of the members of the society when pitted against the individual rights of a solitary member. Of course, the provision has provided adequate safeguards. The section stipulates passing of a resolution by the prescribed majority, and after hearing the member concerned.
17. When a member raises his objections qua a resolution passed by the requisite majority of the society the member must be in a position to show that the resolution is either malafide, or arbitrary or perverse in the fact situation of a case. Only then would the Registrar be empowered to undertake an exercise for the purposes of disapproving the resolution. There could be another situation where the registrar may intervene; in a case where there is violation of principles of natural justice. However, onus lies on the member concerned to establish, such malafides, arbitrariness or perversity qua resolution. The reason is not far to seek. The section provides that once the resolution is passed by the requisite majority after hearing the member concerned the resolution is valid and only the implementation is kept in abeyance and that too for the limited period of 90 days.
18. Therefore, it is not necessary to assign reasons in every case where the registrar accords his approval merely because the consequence of the resolution is to affect the member concerned. To approve means to confirm, to sanction. Approval means the act of approving, granting sanction. Therefore, once the order of approval reflects that the authority was alive to the issues raised and has considered the same, the Authority need not repeat reasons in the order of approval In fact, the language employed by the provision does not warrant any passing of an order. The provision only stipulates that an approval has to be communicated to the society; an approval of a valid resolution/decision of the society so as to make it effective”
3. In the facts of this case, learned Single Judge has noticed taking up decision by the Registrar on 25.1.2016 upon receiving proposal on 27.10.2015 and that was within 3 months, the next date being 26 January, a public holiday, the order as above was not communicated but came to be dispatched only on 28 January and was received by the society on 29 January, we find that the appeal deserves to be admitted.
4. Hence, Admit.
Order in Civil Application
5. Rule returnable on 28.6.2019. Interim relief granted earlier to continue till then.