RAJKOT DISTT COOPERATIVE BANK LTD.versusSTATE OF GUJARAT & ORS.

                    [2014] 14S.C.R. 833


       RAJK OT DISTT COOPERATIVE BANK LTD.                       A
                              v.
               STATE OF GUJARAT & ORS.
              (CivilAppeal No. 10392 of2014)
                   NOVEMBER 19, 2014                             B
[V. GOPALA QOWDAAND ADARSH KUMAR GOEL, JJ.]
       Gujarat Specified Co-operative Societies Election to
Committee Rules 1982- r.3-A (8) and (9) - De/imitation of
constituency/constituencies - For election of Managing C
Committee/Board of the Co-operative Societies specified
u/s. 74C(1) of Co-operative Societies Act - Permissibility-
Held: Where the area of operation is more than one village,
even if the bye-laws of the Societies provide for single
constituency, for each seat provided by the bye-laws a D
separate constituency is required to be delimited under sub-
rule (8) - If the Society fails to do so, the Collector in exercise
of its power under sub-rule (9) would delimit the constituency
- It is duty of the Society to bring its registered bye-Jaws in
conformity with the provisions of the Rules - The bye-laws E
would not prevail over the statutory rules - In the present
case, delimitation of the appellant society was justified as
sub-rules (8) and (9) are applicable in the facts of the case-
Gujarat Cooperative Societies Act, 1961 - s. 74C(1 ).
      Cooperative Societies - Bye-laws of Co-operative F
Societies - Held: The bye-laws of Co-operative Societies in
order to achieve the constitutional object enshrined u!Art.
243ZK must be brought at par with the laws and statutory
provisions of the Societies Act - Constitution of India, 1950
-Art. 243ZK.                                                  G
      Dismis"sing the appeals, the Court
      HELD : 1. Sub-rule (8) is read along with sub-rule
(9) of Rule 3-A Gujarat Specified Co-operative Societies
Election to Committee Rules, 1982 shows that where
the society has. the area of operation exceeding one             H    .
                           833
834      SUPREME COURT REPORTS                [2014] 14 S.C.R.


A . village, even if the bye-laws provide for single
    constituency, the seats provided by the bye laws has to
    be equal to the number of constituency/constituencies
    and therefore, for each seat, a separate constituency
    would be required to be delimited and if not so deli.mited
B by the society, of its own, it would be required for the
    Collector to exercise his power under sub rule (9) of
    Rule 3-A for the delimitation of the constituency in
    accordance with the mandate of sub rule (8) of Rule 3-A.
    [Para 18][844-C-E] :
C       2. 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/
                               ea
  societies have not amend their bye laws, the same has
D to be in conformity with the said Rules by getting suitably
  amended; the effect of the Rule would not stand nullified
  or inoperable. The bye laws of any specified society
  under the provisions of the Co-operative Societies
  Act cannot be permitted to prevail over the statutory
E Rule 3~A (8) and (9) of the Rules. [Paras 20, 21][845-8-C;
  845-F-H] ·
         3. Under Article 13 (2) of the Constitution of India,
   Rules are also regarded as laws. However, the Rules and
   laws framed by the State· Legislatures and the
 F appropriate Government cannot run parallel with the
   principles of the Constitution and the statutory objects
   of the Co-operative Societies Act cannot be disregard
   as it would defeat the purpose of Section 243ZK of the --
   Constitution of India, which provides for election of the _
 G members of the Managing Committee or Board. 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
 H Central laws. [Para 22][846-8-F]
RAJ KOT DISTT COOPERATIVE BANK LTD. v. STATE OF            835
                GUJARAT &ORS.

      4. The sub rules (8) & (9) of Rule 3-A are applicable A
to the appellant society/Societies as the area of operation
is more than one village and therefore the orders passed
by the Collector for the delimitation of the constituency/
constituencies cannot be said to be illegal. The
respondents are directed to hold the election to the B
specified societies as per sub rule (8) and (9) of Rule 3-A
as are applicable to them under the Gujarat Co-operative
Societies Act after the delimitation of the constituency/
constituencies of such societies are made by the
Collector as stated under sub-rule (9) of Rule 3-A. c
[Para 22][851-E-F; 851-H; 852-A]
     Rameshwar Prasad (VI) v. Union of India 2006 (1)
     SCR 562 : 2006 (2) SCC 1 ; Mohinder Singh Gill
     v. Chief Election Commr.1978 (2) SCR 272 : 1978
     (1) sec 405 - relied on.                              D
      Kesavananda Bharati Sripadagalvaru v. State of
     Kera/a 1973 (0) Suppl. SCR1 : 1973 (4) SCC
      225 ; Ku/dip Nayar v. Union of India 2006
      (5) Suppl. SCR 1 : 2006 (7) SCC 1 ; Amreli
      District Co-operative Sale and Purchase Union        E
      Ltd. v. State of Gujarat (1984) 2 GLR 1244;
      Antakampa Milk Producers Co-operative Society
      Limited v. Sabarkantha Milk Producers Union Ltd.
      (2004) 1 GLR 310 ; Shri Sadwadar Seva Sahkari
      Mandali Ltd. & Ors. v. State of Gujarat (2010) 3     F
      G LR 2154 ; Khanodar Milk Producers
      Co-operative Societies Ltd. and Ors. v. State of
     .Gujarat (2012) 1 GLH 245 ; Banaskantha District
      Cooperative Milk Producers Union Ltd. v. State of
      Gujarat (2012) 2 GLR 1522 ; Ziley Singh              G
      v. Registrar Cane Cooperative Societies Lucknow
      1972 (3) SCR 149: 1972 (1) SCC 719-referred
      to.

                                                           H
836         SUPREME COURT REPORTS                 [2014] 14 S.C.R.


A                   . CASE LAW REFERENCE
      (1984) 2 GLR 1244.       referred to             Para 7
      (2004)1GLR310            referred to             Para 9
      (2010)- 3 GLR
                .
                    2154
                     '   .
                               referred to             Para 10.
8     (2012)1 GLH 245          referred to             Para 11
      (2012) 2 GLR 1522         referred to            Para 12 ·
      1972 (3) SCR 149          referred to            Para 14
      1973 (0) Suppl. SCR 1     referred to....        Para 21
 C 2006 (5) Suppl. SCR 1        referred to            Para 21
       2006_ (1) SCR 562        relied on·             Para 21
      ·197s (2) SCR 272         relied on ·            Para 21
       CIVILAPPELLATE JURISDICTION: Civil Appeal No.
 D 10392 of2014.
           From the Judgment and Order dated 04.07.2013 of the
      High Court of Gujarat at Ahmedabad in Special Civil
      Application No. 8905 of2012.    ·
                               . With
 E
          CivilAppeal Nos. 10393-94, 10395-98, 10399, 10400,
      10401and10402of2014.
        Tustiar Mehta, ASG, Diven Parikh, Dushyant Dave,
   HuzeffaAhrriedi, Harin P. Rawal, Sr.Advs., N. K. Pahwa, Mohit ·
 F D. Ram, Nitish Massey, Shamik Sanjanwala, Kunal Vyas,
   Ms. Ekta· Rai, Sanjeev Kapoor (For Mfs. Khaitan & Co.),
   Devendra Singh, V. C. Vaghela, Naresh Choudhary,·.
   Ms. Charudatta M., Selvin Raja, Rosh an Sharma, Aniruddha
   P. Mayee, 8. S. Patel, P. J. Malkon, Yashvardhan, Rajeev Dalal,
 G Piyush Singh, Subramonium Prasad, Preetesh Kapur,
   Ms. Hemantika Wahi, Ms. Jesal, Ms. Puja Singh, Puneet Jain,
   Bharat T. Rao, Abhinav Gupta, Ms. Pratibha Jain,
   A. Venayagam Balan, Amar Dave, Pradhuman Gohil,
   Ms. Taruna Singh, Vikash Singh, Ms. Jaikriti S. Jadeja,
 H Ms. Prabuddha Sharma, Advs. for the Appellants.
  RAJKOT DISTT COOPERATIVE BANK LTD. v. STATE OF                       837
                 GUJARAT &ORS.

       The Judgment of the Court was delivered by                      A
       V. GO PALA GOWDA, J.
      1. The applications for impleadment filed in the SLP(C).
 Nos. 29726 of 2013, 29727 of 2013 and 29728 of 2013 are
 allowed. Leave granted in all the special leave petitions.
                                                                       B
       2. The appellants before this Court have filed these
 appeals questioning the correctness of the impugned orders
 dated 15.11.2011, 30.1.2012 (passed by the Division Bench)
 and common impugned order dated 04.07 .2013 (passed by
 the full Bench) of the High Court of Gujarat atAhmedabad.             c
       3. Since all the appeals are identical in nature, we would
 refer to the facts of the case arising O'lt of Civil Appeal @ .
 SLP(C) NO. 26017 of 2013 for the sake of convenience and
 brevity and for examining tlie rival legal contentions urged in
 these appeals.                                                   D
        4. The State of Gujarat enacted and put on the statute
  book, Gujarat Cooperative Societies Act of 1961 (in short ''the
  Act") 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        E
  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 prrviso 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    F
  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          G
 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 byway of         H
838       SUPREME COURT REPORTS                    [2014) 14 S.C.R.


A  amendment Act of 1982, for conducting elections to the
   committees and office bearers of certain societies which are
   so specified under Section 74C(1) of the Act. As per the
  ·scheme of the said chapter, the election of such specified
   societies is required to be held on such date or dates as the
B Collector may fix under his control. Prior to the amendment,
   the election of the managing committee was to be conducted
   by the society itself as per its registered bye-laws. So far as
   the societies included as specified societies under Section
   74C(1) of the Act are concerned, a separate mode of
C conducting election was provided and the power of conducting
   such election was given to the Collector notwithstanding
   anything contained in the bye-laws of such societies. The said
   aspect was made clear under the provisions of Section 74(C)
   (2) and (3) of the Act which were inserted byway of amending
o Act of 1982. Chapter XI-A of the Act provides for separate
   mode for deciding the election .dispute by Election Tribunal.
   Section 145(U) of the Act provided the State Government with
   rule making power and to regulate all or any of the other matters
   relating to the various stages of elections including preparation
E of the list of voters.
        6. In exercise of the powers conferred upon the State
  Government under Section 168 read with Sections 145(A),
  145(U) and 145(Y), the State Government of Gujarat framed
  the Gujarat Specified Co-operative Societies Election to
F Committee Rules of 1982 (in short "the RlJles"). These Rules
  provide for various stages of election from the preparation of
  the voters list till the result is declared and further consequential
  steps to be taken in the process. In the year 1987, Rules 3-A
  and 3-B were inserted in the Rules of 1982 by the Rule Making
G Authority which provided for delimitation of the constituencies
  in the respective society/societies, for the purpose of
  conducting election of the Managing Committee Members and
  a separate procedure was provided for election of members
  reserved ih sub-section (1) of Section 748 of the Act.
H
RAJKOT DISTT COOPERATIVE BANK LTD. v. STATE OF                839
     GUJARAT & ORS. [V. GOPALA GOWDA, J.]

      7. The constitutional validity of the amended provisions A
of the Act of 1982 was challenged before the High Court in the
case of Amreli District Co-operative Sale and Purchase
Union Ltd. v. State of Gujarat1. The Division Bench of the
High Court declared Sections 17(A), 24, 51 (2), 69 and also
the proviso to Section 74 as ultra vires the Constitution. B
However, theprovisionsofSections74A, 74B, 74C, 74D, 76A,
76B, 80(A) and 80(2) were upheld. The said matters 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 beeri operating C
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 remain·ed as per D
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 E
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 F
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 sub Section (3) of the Act,
has an overriding effect on any other bye-laws of such society. G
It was also found that as per Rule 3-A (8), the number of
constituencies have to be equal to the total number of seats
excluding two reserved seats as provided under Section 74B
'(1984) 2 GLR 1244
2(2004)1GLR310                                                 H
840            SUPREME COURT REPORTS                [2014) 14 S.C.R.


A     of the Act. The learned Single Judge in the said case found
      that the bye law No. 35(1 )(A), provided seats for mor&.'.than
      one person for each constituency and therefore, the bye'Jaws
      were not in conformity with Rule 3-A (8) of the Rules and f§und
      that the bye-laws can operate to the extent of 7 representatives
B     to be elected from 7 separate constituencies of a Specified
      Cooperatil(e Society and therefore, t_he High Court has·neld
      the Rule 3-A(8) of the Rules as valid to that extent only.
             10. In the meanwhile, the Division Bench of the GYJ:arat
      High Court in the case of Shri Sadwadar Seva Safikari
C     Mandali Ltd. & Ors. v. State of Gujarat', went into the case
      once again with regard to the holding of the election f.Q.'.the
      Managing Committee of the Bank in accordance with R;~le 3-
      A (8) of the Rules. The Division Bench found that when Rule 3-
      A (8) and Rule 43 are examined in· j4xtaposition, it has field
D     that the object and intendment of the said Rules and the field
      of the operation of the said two provisions are different
      inasmuch as the former deals with "constituencies" bifur~~ted
      on the "territorial/zone basis". The Division Bench did cbl!lSider
      the view taken by the learned Sir:tgle Judge of Gujara(High
E     Court in the case of Antakampa Milk Produceril'co-
      operative Society Limited (supra) and found that in th~·~aid
      case, the constituencies were bifurcated zone or territoriWise.
        11 . Again the question for consideration of the proviSions
  of Rule 3-A (8) read with Section 74C of the Act arose in the
F case of Khanodar Milk Producers Co-operative Soclrities
  Ltd. and Others v. State of Gujarat". The second Division
  Bench of the High Court found thatthe bye law providing more
  than one representative to be elected in more than one
  constituency would be in contravention of Rule 3-A (8) and it is
G held that, in the case of Sadvadar Sahkari (supra), the
  members of the society were comprised of various classes of
  societies, whereas in the case of Antakampa Milk Producers
      3(2010) 3 GLR 2154

 H    4
          (2012)1GLH245 .
RAJKOT DISTT COOPERATIVE BANK LTD. v. STATE OF                       841
    .GUJARAT & ORS. [V. GO PALA GOWDA, J.]

Cooperative Society Ltd., the members constituted                    A
homogeneous group and not heterogeneous group. Therefore,
adopting the decision of the case Antakampa Milk 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.  B
       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 Gujaraf.6, wherein the
Division Bench of the High Court held that if any of the Rules       C
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     D
by the Rules should be deleted. ltwas further held thatthe Stat~
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        E
Body. The Division Bench of the High Court held that Rule 3-A
(8) of the Rules is neither in conflict with any of the provisions
of the Act nor was "it held to be bad in law for want of Authority
of the delegated legislation. Therefore, Rule 3-A(8) of the Rules
was held to be legal and valid by the High Court by giving its       F
reasons.
      13. Similar questions regarding the legality and validity
of Rule 3-A(8) ofthe Rules aro·se when the present group of
appeals were listed before the High Court. The Division Bench
of the High Court formulated the following legal issues and G
referred the same to the full Bench:
      (1)     Whether Rule 3-Aof the Rules introduced by the
            . amendment dated 10.08.1987 could be applied to
5(2012) 2 GLR 1522
                                                                     H
842         SUPREME COURT REPORTS                  (2014] 14 S.C.R.


A                the societies bye-laws which provide for a single
                 constituency?
           (2)   Whether the .scheme ~f the Rules permit the
                 specified societies having a single constituency,
                 more than one seat for one constituency and
B                whether members of such society can legally be
                 permitted to vote for more than one seat?
           (3)   Whether Collector has jurisdiction to make an order
                 for delimitation of the constituencies, in absence of
                 any proceeding undertaken in accordance with
c                Section 14 of the Act?
           (4)   Whether delimitation of the constituencies under
                 Rule 3-A of the Rules can. only be territory-wise and
                 or whether delimitation of the constituencies can
0                be based upon objects and activities of the member
                 societies or classes of individual members?
           After hearing the learned counsel for both sides, the full
      Bench of the High Court answered the legal questions against
      the appellant-societies by passing the impugned judgment and
E     orders which are challenged in these appeals before this Court
      urging various legal grounds.
          14. We have heard the learned counsel on both the sides.
  It is contended by the learned Senior Counsel for the appellants
  that the findings and reasons recorded in the impugned
F judgment while answering the questions of law on the points
  referred to the Full Bench are not only erroneous but also suffers
  from error in law. Reliance was placed by them upon the
  judgment of this Court in the case of Ziley Singh v. Registrar
  Cane Cooperative Societies Lucknow". It is contented that
G the Rule 3-A (8) of the Rules is contrary to the bye-laws of the
  appellant-Societies and the statutory provisions of the Act. The
  Act provides for amendments ofJbe bye laws without allowing
  the societies to get their bye laws amended as per the

 H '(1972)1 SCC719
  RAJKOT DISTI COOPERATIVE BANK LTD. v. STATE OF                  843
       GUJARAT & ORS. [V. GOPALA GOWDA, J.]

procedure laid under the provisions of the Act and without laying A
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 B
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 C
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. D
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        E
Court by answering the questions referred to it are in
accordance with law. and the same are on proper interpretation
of the relevant Rules· 3-A (8) and (9) and Rule 43 of the Rules
which are in conformity with Chapter XI-A of the Act.
       16. On a careful examination of Rule 3-A (8) of the Rules F
 by us, it is made clear that the said provision is aimed at
geographical i.e. territory or zone wise bifurcation or division.
A salient feature of the Rule 3-A is the delimitation of the
constituencies which includes all specified cooperative
societies. Once the area of operation of any society is more G
than. one village, Sub rule (8) would come into play and the
requirement of the number of constituencies would be equal
to the total number of seats, excluding two seats reserved for
thG categories as provided under section 74 B of the Act.
                                                                  H
844         SUPREME COURT REPORTS .                 [2014) 14 S.C.R.


 A          17. Further, the language of sub rule (9) of Rule 3-A, ·
     makes it clear that the Rule Making Authority has graced the
     Collector with the power to delimit the constituency/
     constituencies prior to the publication of the voters list. The
     delimitation of the constituency/constituencies should be prior
 B to the preparation of the voters' list and/or in any -::ase
     simultaneous with the preparation of voters' list but the voters
     list has to be as per the delimitation of the constituencies. The
     same is the case when the delimitation of the constituency is
     required to be made by the Collector prior to the publication of
 C . the list of voters.
          18. Thus, when sub-rule (8)is read along with su~-rule
   (9) of Rule 3-A, where the society has the area of operation
   exceeding one village, even if the bye laws provide for single
   constituency, the seats provided by the bye laws has to be
 D equal to the number of constituency/constituencies and
   therefore, for each seat, a separate constituency would be
   required to be delimited and if not so delimited by the society,
   of its own, it would be required for the Collector to exercise his
   power under sub rule (9) of Rule 3-A of the Rules for the
 E delimitation of the constituency in accordance with the mandate
   of sub rule (8) of Rule 3-A and thereafter, the process for
   publication of the voters' list is to· be given effect to. ·
     •    19. The power conferred with the Collector for the
    delimitation of the constituency under sub rule (9) is
  F independent and separate and only applicable in the case
    when the election of the members of. any Management
    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
· G 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
 H
            : ':



 RAJKOT    dtsn
            COOPERATIVE BANK LTD. v. STATE OF                       845
      GU4ARAT & ORS. [V. GOPALA GOWDA, J.]

different authority, such power has to be read in addition to the   A
general powi:l°tfor the amendment in the bye-laws. Thus, the
bye laws ofiiny society have to be in conformity with the
provisions otthe Act and the Rules.
      20. It is obligatory on the part of any specified society to
bring about. .tt)e amendment in its registered bye-laws in B
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. C
For this purpQ!_;e sub rule (9) gives the power to the Collector
to delimit the.constituency/constituencies of a society. Thus,
once the area-·of operation of any society exceeds more than
one village ci$:per sub rule (8), the number of constituencies is
required to be bifurcated by the Collector in exercise of his D
power, so a~do make it equal to the total number of seats to
see that effective representation is given to the members of
the society fo{giving fair representation to its members to elect
their true re'p'resentatives to participate in the affairs of the
Society as part of the Managing Committee Members, as the E
society musfrie represented by its elected representatives in
a democratic:ptocess to effectively represent in the Managing
Committee 1:W.hich is an indispensible parameter for the
democratic Institutions to achieve the laudable object of Co-
operative movement in the country, which is the constitutional F
philosophy as enshrined in Chapter XI A of the Constitution,
which has been inserted by way of constitutional amendment.
      21. Thus, the bye laws of any specified society under the
provisions of the Co-operative Societies Act cannot be
permitted to prevail over the statutory Rule 3-A (8) & (9) of the G
Rules. The moment the area of operation of any specified
society exceeds one village, sub rule (8) would come into play,·
irrespective of the fact that whether members of such society
constitute homogenous group or heterogeneous group.
                                                                    H
846       SUPREME COURT REPORTS                 [2014] 14S.C.R.


A       22. Further, the elections to either the Managing
  Committee or Board must be held democratically by giving
  representation to all its members, as stated in the preamble ·
  of our Constitution, which is held to be the basic feature of the
  Constitution by the constitutional Bench of this Court in the
B cases of Kesavananda Bharati Sripadagalvaru v. State of
  Kera/a 7 and Ku/dip Nayar v. Union of lndia 8 . Under Article
  13 (2) of the Constitution of India, Rules are also regarded as
  laws. However, the Rules and laws framed by the State
  Legislatures and the appropriate government cannot run
c parallel with the principles of the Constitution and the statutory
  objects of the Co-operative SoCietiesAct cannot be disregard
  as it would defeat the purpose of Section 243ZK of the
  Constitution of India (Ninety-Seventh Amendment) Act 2011,
  inserted as per the 97'h Constitutional Amendment, which
o provides for election of the members o.f the Managing
  Committee or Board. If the rules provide that not more than 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
E 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 Ku/dip Nayar's case (supra), this Court after
F 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
G 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

   '(1973) 4 sec 225
 H •(2006)7 sec 1
RAJ KOT DISTT COOPERATIVE BANK LTD. v. STATE OF                  847
      GUJARAT & ORS. [V. GOPALAGOWDA, J.]

   691 of his separate judgment ruled as under: (SCC pp.         A
   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 Constitution, and B
     (2) it must not offend against the provisions ofArticles
     13(1) and (2) of the Constitution. 'Basic structure', by
     the majority judgment, is not a part of the
     fundamental rights nor indeed a provision of the
     Constitution. The theory of basic structure is woven C
     out of the conspectus of the Constitution and the
     amending power is subjected to it because it is a
     constituent power. 'The power to amend the
     fundamental instrument cannot carry with it the power
     to destroy its essential features'-this, in brief, is the D
     arch of the theory of basic structure. It is wholly out of
     place in matters relating to the validity of ordinary laws
     made under the Constitution."
            xxx                   xxx                xxx         E
   142. Article 80(4) prescribes the manner of voting and
   election of the representatives of States for the following
   Council of States in the following terms :
    · "80. (4) The representatives of each State in the
      Council of States shall be elected by the elected          F
      Members of the Legislative Assembly of the State in
      accordance with the system of proportional
      representation by means of the single transferable
      vote."
            xxx                   xxx                xxx         G
   336. In the words of Jaganmohan Reddy, J.
   (Kesavananda Bharati case reported in (1973) 4 SCC
   225) in his separate judgment, the 1"elements of the
   basic structure are indicated in the Preamble and
   translated in the various provisions of the Constitution"     H
848   SUPREME COURT REPORTS                   [2014] 14S.C.R


A     and the "edifice of our Constitution is built. upon and
      stands on severai props" which, if removed would result
      in the Constitution collapsing and which include the
      principles of "sovereign democratic republic" and
      "parliamentary democracy", a polity which is "based on
B     a representative system in which people holding
      opposing view to one another can be candidates and
      invite the electorate to vote for them" (SCC p. 638, para
      1159).
      341. Some of the important holdings were set down in
c     para 92 of the aforementioned (Mohinder Singh Gill        v.
      Chief Election Commr. reported in ( 1978) 1 SCC 405)
      judgment "for convenience" and to "synopsise the
      formulations". The holdings included the following: (SCC
      p. 452)
D       ."92. (2)(a) The Constitution contemplates a free
        and fair election and ·vests comprehensive
        responsibilities of superintendence, direction and
        control of the conduct of elections in the Election
        Commission. This responsibility may cover powers,
 E      duties and functions of many sorts, administrative or
        other, depending 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
 F
         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
         si/erit Article 324 is a reservoir ofpower to act for the
         avowed purpose of, not divorced from, pushing
 G
         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
 H
RAJ KOT DISTT COOPERATIVE BANK LTD. v. STATE OF                     849
      GUJARAT & ORS. [V. GOPALAGOWDA, J.]

        of it as fairplay-in-action in a most important area of A
        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 B
        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 (reported
     in (1992 Supp (2) SCC 651) also resulted in similar            C
     views being reiterated by this Court in the following words:
     (SCC p. 741, para 179)
        "179. Democracy is a part of the basic structure of
        our Constitution; and rule of law. and free and fair
        elections are basic features of democracy. One of D
        the postulates of free and fair elections is provision
        for resolution of election disputes as also adjudication
        of disputes relating to subsequent disqualifications by
        an independent authority."
                                                                  E
                                   (emphasis laid tiy this Court)
      In Rameshwar Prasad (VI) v. Union of lndia 9, this
Court has held as under:-
     "229. Lord Greene said in 1948 in the famous
      Wednesburv case (reported in (1948) 1 KB 223) that            F
     when a statute gave discretion to an administrator to take
     a decision, the scope of judicial review would remain
     limited. He said that interference was not permissible
     unless one or the other of the following conditions was
     satisfied, namely the order was contrarv to law. or relevant   G
     factors were not considered. or irrelevant factors were
     considered: or the decision was one which no reasonable
     person could have taken ...... .

'(2006) 2 sec 1                                                     H
850             SUPREME COURT REPORTS                      (2014) 14 S.C.R.


A              257. Therefore, the well-recognised position in law is that
               purity in the electoral process and the conduct of the
               elected representatives cannot be isolated from the
               constitutional requirements. "Democracy" and "free and
               fair election" ar.e inseparable twins. There is almost an
B·             inseverable umbilical cord joining them. In a democracy
               the little man-voter has overwhelming importance and
               cannot be hijacked from the course of free and fair
               elections ...... ".
                                             (emphasis laid by this Court)
c           In Mohinder Singh Gill v. Chief Election Commr. 10,
      this Court has held as under:-
               "2. Every significant case has an unwritten legend and
               indelible lesson. This appeal is no exception, whatever
D              its formal result. The message, as we will see at the end
               of the decision, relates to the pervasive philosophy of
               democratic elections which Sir Winston Churchill vivified
               in matchless, words:
                  "At the bottom of all tributes paid to democracy is the
E                 little man, walking into a little booth, with a little pencil,
                  making a little cross on a little bit of paper- no amount
                  of rhetoric or voluminous discussion can possibly
                  diminish the overwhelming importance of the point."
               23. Democracy is government by the people. It is a
F              continual participative operation, not a cataclysmic.
               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
G              minimum credential of popular Government is appeal to
               the people after everv term for a renewal of confidence ..
               So we have adult franchise and general elections as
               constitutional compulsions. "The right of election is the

H     10
           (1978) 1   sec 405
 RAJ KOT DISTT COOPERATIVE BANK LTD. v. STATE OF                       851
       GUJARAT & ORS. [V. GOPALAGOWDA, J.]

      very essence of the constitution" (Junius). It needs little A
      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 B
      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, seep.
      128, para 303)(reported in 1975 Supp SCC 1):                   C
         "If the amending body really exer.cised judicial power,
         that power was exercised in violation of the principles
         of natural justice of audi alteram partem. Even if a
         power is given to a body without specifying that the
         rules of natural justice should be observed in exercising D
         it, the nature of the power would call for its
         observance ............ "
                                    (emphasis laid by this Court)
        In view of the law laid down by this Court in the aforesaid    E
 cases, we have to hold that the sub rules (8) & (9) of Rule 3-A
 are applicable to the appellant society/Societies as the area
 of operation is more than one village and therefore the orders
 passed by the Collector for the delimitation of the constituency/
 constituencies cannot be said to be illegal. Further, we hold         F
 that there will be no proper representation of the voters to their
 respective specified societies for electing representatives of
 their area which would materially affect the result of the election
·and the impugned provisions and Rules are legally justifiable.
       For the reasons stated supra, no relief can be granted in G
favour of the appellant-societies by setting aside the election
notification and the prayer for setting aside the impugned
JUcigement and orders. Hence, they deser\ie to be dismissed.
The respondents are directed to hold the election to the
.. pecified societies as per sub rule (8) and (9) of Rule 3-A of H
852          SUPREME COURT REPORTS                  [2014] 14 S.C.R.
                           •

A     the Rules as are applicable to them under the Gujarat Co-
      operative Societies Act after the delimitation of the
      constituency/constituencies of such societies are made by the ·
      Collector as stated under sub-rule (9) of Rule 3-A of the Rules.
            23. For the reasons stated supra, we do not find any
B     reasons whatsoever to interfere with the impugned judgment
      and orders of the High Court. It is needless to make
      observation that the State government and its officers could
      not give effect to the provisions of the Co-operative Societies
      Act and Rules for some time on account of which some of the
C     societies have challenged the impugned provisions and Rules
      before the High Court, even after litigation was concluded by
      the Division Bench afone stage, the State and its officers have
      not implemented the impugned provisions and Rules without
      any valid reasons. The members of the specified societies in
D     the State have a right to elect their true representatives to
      represent them as Managing Committee or Board members
      of the District Co-operative Societies and other allied societies
      after de-limitation of the constituency/ constituencies and
      therefore, we direct them to see that the impugned provisions
 E    and Rules must be implemented forthwith without further delay
      and submit compliance report within 8 weeks from the date of
      report of the copy of this order.
            24. The appeals are dismissed. No Costs .

.F
      Kalpana K. Tripathy                            Appeals dismissed.