Devabhai Jivabhai Vs. Becharbhai Valabhai Vaniya & Ors  Insc 433 (28 August 2001)
Shah & Brijesh Kumar Shah, J.
appellant has filed the present appeal against the judgment and order dated 23rd April, 2001 passed by the High Court of Gujarat
at Ahmedabad in Civil Application No.680 of 2001 in Letters Patent Appeal No.25
Single Judge in Special Civil Application No. 11161/2000 passed the order to
the effect that if the Liquidator had taken over the charge of the society,
then he was directed to proceed further in the matter and protect the interest
of the society and submit his report on or before 10.1.2000. That order was
challenged by the respondent by filing the aforesaid LPA.
impugned order, without deciding the Letters Patent Appeal the High Court has
allowed the same and has ignored various orders passed by the concerned
authorities in number of petitions filed by the parties. The Court held that if
the Liquidator is allowed to take charge of the agricultural land, its yield is
bound to suffer because he will not be in a position to till the land with the
same zeal as that of the members of the Co-operative society who have been
cultivating the land since last 25 years. The Court, therefore, stayed the
operation of the interim relief which was granted by the learned Single Judge
with a clarification that the society should continue to remain in possession
of the land in question for cultivation purposes, subject to the outcome of the
petition and any orders that might be made during the pendency by the learned
Single Judge. Effect isafter the aforesaid order, the Letters Patent Appeal
which was filed against the interim order passed by the learned Single Judge
would not survive.
facts of the case are that Dr. Ambedkar Samudaik Kheti Sahakari Mandali of
village Pipali, District Surendranagar is a registered society, registered on
29.3.1975, allegedly having aim and object of upliftment of the schedule tribes
through agricultural activities, providing employment and financial assistance
to the members of the lower strata of the society. Appellant is a member and
respondent no.1 is Chairman of the Mandali. On 7.7.1977, 184 acres of
government land was allotted to the Society on collective basis by the Deputy
Collector, Dhangadhra. At the time of inception of the society, there were 24
members as against 27 of the present. It is contended that out of the 27
members, 23 belong to one and the same family. The Chairman of the society,
respondent no.1, is alleged to have been running the society since last more
than 25 years. The District Registrar, Cooperative Societies, Surendranagar,
passed an interim order under Section 107 of the Gujarat Cooperative Society
Act, 1961 (hereinafter referred to as the Act) and appointed Co- operative
Officer as Liquidator and gave opportunity of making representation against the
said order to respondent no.1.
on 29.5.2000 the District Registrar, Cooperative Societies, Surendranagar
passed a final order under Section 107(3) of the Act, with the direction that
the Liquidator should complete the procedure of liquidation within prescribed
appears that the order passed by the District Registrar was challenged by
filing appeal before the Additional Registrar, Co- operative Societies
(Appeals), Ahmedabad. The authority admitted the appeal but no interim order
was passed. Hence, the Society preferred a revision application before the
Deputy Secretary, Co- operative Societies (Appeals), Ahmedabad. In that
revision application, the interim relief claimed by respondent no.1 was
order was challenged by filing Special Civil Application No.4021 of 1999 before
the High Court of Gujarat at Ahmedabad. In that petition it was contended that
the Liquidator has taken charge of the Society on 2.6.1999. The learned Single
Judge by order dated 21.1.2000 rejected the said petition by observing that
against the interim order petition was not required to be entertained and
directed the Additional Registrar to decide the appeal within 15 days and in
the meantime, parties were directed to maintain status quo.
by order dated 25.9.2000 the Additional Registrar, Co-operative Societies
(Appeals), Ahmedabad set aside the final order dated 29.5.1999 passed by the
District Registrar, Surendranagar and directed him to decide the matter afresh
after hearing the parties.
appellant has also produced on record number of other orders passed by the High
Court in different matters between the parties. One such order is dated 12th March 2001 passed in Special Criminal
Application No. 78 of 2000 filed by respondent No.2, wherein after considering
the various contentions, the Court finally observed that dispute has to be
finally resolved by the District Registrar of the Co-operative Societies and
not by the process adopted by the Society. The Court also observed that there
was interim order to maintain status quo as it existed.
the aforesaid narration of facts, it is apparent that the interim order dated
06.3.1999 passed by the District Registrar, Co- operative Societies, Surendranagar
under Section 107 (1) of the Act remains in force. By the said order,
Co-operative Officer is appointed as the Liquidator of the Society. Whether
that order should be made final or not is still required to be decided by the
District Registrar as the matter has been remitted back by the Additional
Registrar Co- operative Societies (Appeals) by order dated 25th September 2000.
orders passed by the High Court directing the parties to maintain status quo
are in operation. The Liquidator has taken charge of the Society on 2nd June, 1999. On 29th December 2000, the Liquidator appointed a Watchman to look after the land
of the Society. In such a situation, there was no reason for the High Court to
set at naught previous orders passed in different proceedings without deciding
the Letters Patent Appeal on merits.
the reason given by the High Court for setting aside the status quo order is,
on the face of it, unjustifiable. The Court held that if Liquidator is allowed
to take charge of agricultural land, its yield is bound to suffer because he
will not be in a position to till the land with the same zeal as that of the
members of the Co-operative Society who have been cultivating the land since
last 25 years. This reasoning is based on the assumption that the Liquidator
who is an official of the Government will not be in a position to manage the
affairs of the Co- operative Society including getting the land cultivated. The
appointment of Liquidator or receiver, as the case may be, is known method for
protecting the property in dispute. Unauthorised cultivation of land with zeal
does not confer a right to continue cultivation of the land in violation of the
law. Allegation against the Society was that it was formed by one family and 23
members of the said society belonged to the same family. Because of the said
fraud being noticed, the District Registrar exercised his powers. The Gujarat
Co-operative Societies Act empowers the District Registrar to pass such
appropriate orders. Further if reasoning of the High Court is accepted, in no
set of circumstances, Liquidator could be appointed for the Co-operative
Societies or for Companies registered under the Companies Act under different
enactments. Appointment of Liquidator is accepted form of winding up of a
Society or a Company.
in case where Liquidator is appointed of a Society or a company having
agricultural land, he is not required to cultivate the same personally and he can
certainly take steps for its cultivation either by giving licence or by agency
agreement. Therefore, there is no question of agricultural yield suffering
because of appointment of a Liquidator. Similarly, in appropriate cases, Court
may appoint receiver to protect and preserve the property. In some cases, the
receiver may permit the person who is holding the property to act as an agent
of the receiver with a direction to deposit the royalty amount fixed by the
receiver or on such other conditions which may meet the interests of justice.
This may prevent further injury to the rights of the parties and protect the
property. If the allegation against the respondent that Society was established
by committing fraud is found to be true then such person should not be
permitted to take undue advantage of his fraud.
present case, at present the dispute is pending with the District Registrar.
Interim order passed by the District Registrar is in force. Liquidator has
taken possession of the land. Therefore, till the disposal of the matter by the
District Registrar, it is directed that Liquidator would continue in possession
of the property. To avoid any dispute and also to see that the agricultural
yield does not suffer, the Liquidator would grant licence to cultivate the land
on the terms and conditions which may be fixed by him or on the basis of agency
agreement by recovering a stipulated amount, to the Society or its members. In
any case, sale of the agricultural produce from the land in question should be done
under his supervision and control.
the above directions, the impugned order passed by the High Court is set aside.
We make it clear that the authorities shall decide the matter on merits without
being influenced by any observations made in this order.
appeal stands allowed with no order as to costs.