Holding

The Supreme Court dismissed Chaudhary’s appeals, upheld his removal, limited his disqualification to the three‑year period originally ordered, and declined to review the Registrar’s findings.

Summary

Vipulbhai Mansingbhai Chaudhary, who continued as Chairman of a district cooperative milk union beyond his three‑year term, was served a show‑cause notice under s.76B(1) and (2) of the Gujarat Co‑operative Societies Act, 1961. The Registrar removed him and disqualified him for three years; a later order extended the disqualification to six years under the 2015 amendment. Chaudhary challenged the Registrar’s findings, the combined notice, the validity of a six‑year disqualification, and argued that action should be against the committee under s.81. The Supreme Court held that the Registrar’s factual findings are not open to re‑examination, that a combined notice is permissible, that disqualification can follow removal, and that the amendment cannot be given retrospective effect; consequently the six‑year disqualification was untenable and the earlier three‑year order stands. All of Chaudhary’s appeals were dismissed.

Issues considered

The scope of judicial review of the Registrar’s factual findings under s.76B.
Whether a single show‑cause notice can invoke both s.76B(1) and s.76B(2).
Whether disqualification under s.76B(2) can be imposed without a prior order of removal under s.76B(1).
The retrospective effect of the Gujarat Co‑operative Societies (Amendment) Act, 2015 on the period of disqualification.
Whether action should be directed against the individual officer or the committee under s.81.
The maximum period of disqualification permissible under s.76B(2) for acts preceding the amendment.

Legislation cited

Code of Civil Procedure, 1908s. 11
Code of Criminal Procedure, 1973s. 300
Constitution of Indias. 136, s. 20, s. 226
General Clauses Act, 1897s. 14
Gujarat Co-operative Societies Act, 1961s. 76B, s. 81
Gujarat Co-operative Societies (Amendment) Act, 2015s. 76B(2)
Gujarat General Clauses Act, 1904s. 7

Subjects

cooperative societiesremoval of officerdisqualificationshow‑cause noticestatutory interpretationretrospective legislationjudicial reviewSection 76BSection 81natural justice

Judgment

[2017] 6 S.C.R. 733

VWULBHAIMANSINGBHAICHAUDHARY A
v.
STATE OF GUJARAT & ANOTHER
(Civil Appeal No.14678of2015)
APRIL 17, 2017 B

[J. CHELAMESWAR AND ABHAY MANOHAR SAPRE, JJ.)
Gujarat Co-operative Societies Act, 1961:
s. 76B - Appellant elected as Chairman of District Co-
operative Milk Producers Union Ltd. for three years - However. he C
continued to hold office beyond period of three years - Show cause
notice by Registrar of Co-operative Societies u/s. 76B(l) & (2) -
Order dated 10.3.2015 by Registrar removing appellant from office
and further disqualifying him for a period of three years - Writ
petition by appellant - Single Judge upheld the action of Registrar D
insofar as it pertained to the removal of appellant but set aside the
order insofar as it pertained to his disqualification for three years
- LPA by appellant, dismissed - Plea of appellant in Supreme Court
that his removal be set aside after examining the correctness of the
conclusion recorded by Registrar w.r.t. the Charge Nos. 2, 3, 6, 9,
JO and 11 framed against him - On appeal, held: The conclusions E
recorded by Registrar in his order removing appellant from office,
remained undisturbed-by High Court - In substance, the plea of
appellant was that Supreme Court should act as an appellate Court
to determine the correctness of conclusion drawn on the basis of
evidence before Registrar. which cannot be accepted - This is an
F
exercise which ought not to be normally undertaken even by High
Courts in the jurisdiction u/Art. 226 nor by Supreme Court on further
appeal by leave under Art.136 of the Constitution - High Court
rightly declined to interfere witli the findings - Appellant's
disqualification for a period of three years held to be reasonable - -
No error found in the decision of High Court in this regard - G
Constitution of India - Arts. 136, 226.
ss. 76B and 81 - Exercise of power under both the sections,
by Registrar. if mandatory - Appellant disqualified u/s. 76B(2) -
Plea of appellant that his disqualification u/s. 76B(2) is
H
733
734 SUPREME COURT REPORTS [2017] 6 S.C.R.

A unsustainable, because each one of the acts or omissions which
formed the basis for action against appellant was either taken by
or ratified by the entire governing body ("Committee'') of the society,
therefore, action if at all required, ought to be taken against the
Committee of the society uls.81 and not against individual members
thereof u/s. 76B - Held: Committees are inanimate bodies and are
B
nothing but a collective name for the conglomeration of individual
officers of the society - Further, it is essentially for the Registrar tu
make an assessment whether on the facts and circumstances of each
case either action is tu be taken against the Committee or an
individual officer or both - The decision of Registrar taken in
c exercise of such discretionary power would not be amenable to
challenge on the ground that he failed tu take action under both
the sections, i.e., 76B and 81 - The Act envisages joint and several
action against officers in their capacity as members ofthe Committee.
s. 76B(2) - Two show cause notices issued tu appellant. one
D uls.76B(J) for his removal and the other u/s.76B(2) for his
disqualification - Appellant disqualified fur six years u/s. 76B(2) -
Permissibility of - Held: Section 76B(2) as of today provides fur
disqualification of an officer for a period not exceeding six years -
Originally the Section provided for disqualification only for four
years - But the "four years" period was substituted by "six years"
E period by 2015 amendment - However, in the instant case. all the
acts and omissions which formed basis for action against appellant
pertained to the period anterior to 2015 amendment - Further. there
is nothing in the said amendment act which warrants an
interpretation that the legislature intended tu create a disqualification
F which would run/or a maximum period ofsix years with retrospective
effect - Thus, appellants disqualification for six years held not
tenable - Gujarat Co-operative Societies (Amendment) Act, 2015
(Act No.12 of 2015).
76B(l) & (2) - Two show cause notices issued to appellant.
G one uls. 76B(l) for his removal and the other u/s. 76B(2) for his
disqualification, both on same set offacts - Permissibility of- Held:
The basic requirement ofsub-section (2) is that the power thereunder
could be exercised only against an officer of a society who has
already been removed from office u/sub-section (1) - Therefore, the
factual basis on which action u/sub-section (1) and sub-section (2)
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 735
GUJARAT & ANOTHER

of s. 76B is to be taken is bound to be the same, though the reafons A
and logic on the basis of which action under either of the sub-
sections is to be taken could be different.
s. 76B(2) - Valid notice under - Requirement of - Explained.
Words and phrases - 'Committee' - Meaning of - Explained,
in context of Gujarat Co-operative Societies Act, 1961. B
Repeal - Of an enactment - Effect of - Discussed.
Disposing of the appeals, the Court
HELD: 1.1 Section 768, Gujarat Co-operative Societies
Act, 1961 ('THE ACT') provides for (i) removal of "any officer"; c
and (ii) disqualification of such a removed officer to hold or contest
election to any office either of that Society or any other Society
for a certain period. It was in exercise of the power under Section
768 that action was initiated against appellant initially by issuing
Show-Cause Notice-I culminating in the final order of Registrar
by which appellant was removed from the office of the Chairman D
of the Union and also disqualified for a period of three years from
holding any office or to participate in any election. [Pa:ras 23, 26]
[747-D; 749-D]
1.2 The conclusions recorded by the Registrar, in his final
order removing appellant from office, remained undisturbed by E
the High Court. The High Court recorded that of the various
charges leveled against appellant, Charges Nos. 2, 3, 6, 9, 10
and 11 had been held proved by the Registrar. The High Court
further held that such findings could not be determined in
exercise of the jurisdiction under Article 226 of the Constitution F
of India. The said view of the Single Judge was endorsed by the
Division Bench in Letters Patent Appeal. [Para 27) [749-E; 750-A]
1.3 It is a submission of the appellant that the correctness
of the conclusion recorded by the Registrar that the charges 2,
3, 6, 9, 10 and 11 are framed against appellant is required to be G
examined. In substance, the argument is that this Court should
act as the appellate Court to determine the correctness of tlie
conclusion drawn on the basis of the evidence before the
Registrar. It is an exercise which ought not to be normally
undertaken even by the High Courts in the jurisdiction under
Article 226 nor by this Court on further appeal by leave under H
736 SUPREME COURT REPORTS [2017) 6 S.C.R.

. A Article 136 of the Constitution. The High Court rightly declined
to interfere with those findings. No error is found in the decision
of the High Court in this regard. The exercise of examining the ·
correctness of the conclusions recorded by the Registrar is
declined to be undertaken. [Paras 28, 29) [750-F-G; 751-A-B)
B 2. Section 81 authorises the supersession of the Committee
of a Society. Committee of a cooperative society by definition is a
body to which "the direction and control of the management of
the affairs of a Society is entrusted to". Committee is nothing but
a collective name for the conglomeration of the individual officers
of the society. Committees are inanimate bodies. They function
C through human agency i.e. the individual members of the
Committee. Section 76B authorises action against individual
officers of a Society. In either case, action is required to be taken
upon the formation of the opinion by the Registrar that (i) there
is a persistent default; or (ii) negligence in the performance of
. D duties; or (iii) commission of an act which is prejudicial to the
interest of the Society or its members. The Registrar is conferred
with a discretionary power to take action against officers/members
of the Committee individual or against the Committee
collectively. The decision of the Registrar taken in exercise of
such discretionary power would not be amenable to challenge on
E the ground· that the Registrar failed to take action under both
Section·s 76B and 81 unless the individual member against whom
actio.n is proposed pleads and proves ma/a fide. In substance,
THE ACT envisages joint and several action against the officers
in their capacity as members of the committee. While Section 81
F is designed to deal with the dereliction of the duties by the
committee as a body, Section 76B deals with the dereliction of
duties of the individual members of the committee. The Registrar
is invested by THE ACT with the discretion to choose the proper
course of action depending upon the situation. [Paras 39-44)
[755-E-F; 756-C-D; 757-H; 758-A, B, C-D)
·G
3. Section 76B(l) contemplates removal of an officer of a
society if the Registrar is satisfied that such an officer is guilty of
any one of the misconducts specified under the section. Sub-
section (2) further authorises the Registrar to disqualify such an
officer either to contest or to hold any office in that society from
H · which the officer is removed and also in any other society for a
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 737
GUJARAT & ANOTHER .

period to be specified by the Registrar subject to a statutory A
outer limit. From the language of sub-section (2), it appears that
the Registrar is not obliged to disqualify every officer against
whom an order of removal under Section 76B(l) is passed. Going
by the text of sub-section (2) which says that the "Registrar may
... direct that the officer so removed shall be disqualified ..... ", B
the power to disqualify is discretionary. The basic requirement
of sub-section (2) is that the power thereunder could be exercised
only against an officer of a society who has already been removed
from office. Therefore, the factual basis on which the action under
sub-section (1) and sub-section (2) of Section 76B is to be taken
is bound to be the same though the reasons and logic on the C
basis of which action under either of the sub-sections is to be
taken could be different. Depending upon the intensity and gravity
of the misconduct in a given case, mere action (under Section
76B(l)) of removal from office might suffice and meet the ends of
justice. Whereas in some cases action under both the sub-sections D
might be called for. But in no case action only under Section
76B(2) is permissible without taking action under Section 76B(l).
(Para 46] (758-G-H; 759-A-D]
4. Further, the requirements of valid notice under Section
76B(2) are that the notice should indicate broadly the reasons
which prompt the Registrar to initiate action and the period for E
which the person, against whom the action is initiated, is proposed
to be disqualified. Section 76B(2) as of today provides for
disqualification of an officer for a period not exceeding six years.
Originally the Section provided for disqualification only for four
years. But the "four years" period was substituted by "six years". · F .
period by the Gujarat Co-operative Societies (Amendment) Act,
2015 (Act No.12 of 2015). However, all the acts and omissions
which formed the basis for action against appellant pertained to
the period anterior to the Act No.12 of 2015. Substitution of parts
of an enactment is nothing but pro tanto to repeal those parts.
Normally when an enactment is repealed, any action initiated under G
that enactment during its currency should lapse. To meet such a
contingency, the Gujarat General Clauses Act made a provision
under Section 7. It seeks to preserve various rights and
obligations acquired or incurred under repealed enactments. As
H
738 SUPREME COURT REPORTS [2017] 6 S.C.R.

A a logical corollary to this proposition, no right or liability can be
created by a repealing enactment, which is inconsistent with the
rights and obligations conferred under the repealed Act unless
the repealing enactment makes an express declaration to that
effect or adopts some other technique known to law to achieve
B that purpose. Giving retrospective effect to the repealing
enactment is one of the techniques by which the legislature seeks
to achieve that purpose. However, there is nothing in Act No.12
of 2015 which warrants an interpretation that the legislature
intended to create a disqualification which would run for a
maximum period· of six years with retrospective effect. (Paras
C 48, 51, 52-54) (760-D; 761-F; 762-A-D; 763-A-C)
Superintendent (Tech.I) Central Excise l.D.D. Jabalpur
& Ors. v. Pratap Rai (1978) 3 SCC 113 - relied on.
Thimmasamudram Tobacco Co. v. Assistant Collector
of Central Excise, Nellore Division, Nellore AIR 1961
D AP 324 - approved.
Case Law Reference
AIR 1961 AP 324 approved Para 36
(1978) 3 sec 113 relied on Para 36
E
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14678
of2015.
From the Judgment and Order dated 19.10.2015 of the High Court
of Gujarat at Ahmedabad in Letter Patent Appeal (LPA) No. 1302 of
F 2015 in Special Civil Application No. 9618 of2015
WITH
W. P. (C) No. 824 of2015
C. A. No. 13784 of2015

G C. A. No. 1881 of2016.
Tushar Mehta, ASG, Fali S. Nariman, Harin P. Raval, Sr. Advs.,
Prakash Jani, AAG., Subhash Sharma, Anirudh Sharma, Naresh
Chaudhary, Abhaid Parikh, Anip Sachthey, Ms. Anjali Chauhan,
Ms. Kiran Dhawan, Chetanya Singh, Ms. Ria Sachthey, Ms. Hemantika
H Wahi, Ms. Jesal Wahi, Advs. for the appearing parties.
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 739
GUJARAT & ANOTHER

The Judgment of the Court was delivered by A
CHELAMESWAR, J.
C.AN0.14678/2015, C.A. No.1881/2016 & C.A.No.13784/2015
1. There are three appeals before us - two 1 of them filed by one
Vipulbhai Mansingbhai Chaudhary, ('Chaudhary' hereafter) and the third
filed by the State of Gujarat & Others2• B
2. The matter arises under the Gujarat Co-operative Societies
Act, 1961 (for short 'THE ACT'). The Mehsana District Co-operative
Milk Producers Union Ltd. (hereafter 'UNION') is a Society within the
meaning of the expression under Section 2( 19)3 of THE ACT. Chaudhary
was elected as its Chairman for a period of three years commencing c
froJll 2.5.2011 to 1.5.2014. However, he continued to hold the office
beyond the period of three years by virtue of the operation of Section
74C(2) - as it then existed:
"Section 74C(2). When the election of all the members of
the committee of any such societies held at the same time, D
the members elected on the committee at such general
election shall hold office for a period of three years from
the date on which the first meeting is held and shall continue
in office until immediately before the first meeting of the
members of the new committee."
E
3. During the continuance of Chaudhary in the office, a show-
cause notice was issued on 12.1.2015 (hereafter "Show-Cause Notice-
!") by the Registrar" of the Co-operative Societies (hereafter "the
Registrar") purporting to be one issued under Section 76B(l) & (2) of
THE ACT calling upon Chaudhary to show cause why he should not be
removed from the office for various reasons mentioned therein.~ F
Chaudhary challenged the said show-cause notice by way of a writ

'Civil Appeal Nos.14678 of2015 and 1881 of2016
'Civil Appeal No.13784/2015.
' Section 2{ 19). "Society" means a co-operative society registered, or deemed to be
registered, under this Act;" G
4
Section2{17)-"Registrar" means a person appointed to be the Registrar of Co-operative
Societies under this Act; and includes to the extent of the powers of the Registrar
conferred on any other person under this Act, such person and includes an Additional
or Joint Registrar; ·
'Though the notice purported to have been issued invoking both sub-sections {I) and
(2) of Section 76B, there is no whisper in the said notice regarding the proposal to
disqualify Chaudhary for a further period. H
740 SUPREME COURT REPORTS [2017] 6 S.C.R.

A petition. It was dismissed by the Gujarat High Court as pre-mature.
The dismissal was confirmed by a Division Bench in a Letters Patent
Appeal. Aggrieved, Chaudhary carried the matter to this Court by way
ofSLP (Civil) No.4668/2015 which was filed on 12.2.2015.
4. During the pendency of SLP (Civil) No. 4668 of 2015, the
B Registrar passed a final order on 10.3.20156 by which Chaudhary was
removed from the office and also disqualified for a period of three years
from holding "any office in any Sahakari Manda! to participate in any
election for a period of three years".
5. This Court by an order dated 20.3.2015 disposed of SLP(C)
c No. 4668/2015 directing that status quo regarding the order of the Registrar
dated 10.3.2015 be maintained till 30.3.2015 to enable Chaudhary to
approach the appropriate forum challenging the correctness of the
Registrar's order dated 10.3.2015.
6. Chaudhary filed a statutory revision before the State
D Government. The Government by its order dated 8.5.2015 confirmed
the Registrar's order dated 10.3.2015.
7. Aggrieved by the same, Chaudhary filed a Writ Petition No. 9618/
2015. A learned judge of the High Court by his judgment dated29.9.2015
upheld the action of the Registrar insofar as it pertained to the removal
E ofChaudhary from the office but set aside the order insofar as it pertained
to the disqualification ofChaudhary for a future period of three years. It
was held that proceedings under Section 76B(2) for disqualifying
Chaudhary could have been initiated only after an order under Section
76B(l) is passed. Since the Registrar acted on the basis ofa composite
notice (Show-Cause Notice-I), the action of the Registrar under Section
F 76B(2) could not be sustained.
8. Aggrieved by that part of the judgment in Writ Petition No.9618/
20 l S insofar as it went against him, Chaudhary preferred Letters Patent

• .....Thiis, talcing into consideration the facts as a whole, because of the irregularities
G committed by him, the Union has suffered great financial damage and serious damage
has been caused to the Mehsana Jilla Dudh Utpadak Sangh as well as the lacs of
members providing milk in the milk societies connected with it and interests of the
Pashu Palaks. In such circumstances, l consider it proper to remove him from the post
and also for the aforesaid reasons, think it proper to held him disqualified to have any
office in any Sahakari Manda! or to participate in any election for a period of three
years.
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 741
GUJARAT & ANOTHER [CHELAMESWAR, J.]

Appeal (LPA) No.1302 of 2015. The said LPA was dismissed on A
19 .10.2015. Chaudhary approached this Court by way of Special Leave
Petition (C) No.33630/2015 [now C.A.No.14678 of 2015].
9. In view of the fact that the High Court had set aside the order
of the Registrar disqualifying Chaudhary for a period of three years, the
Registrar issued a fresh show-cause notice dated 3.10.2015 (hereafter B
'Show-Cause Notice-II') calling upon Chaudhary to explain as to why
he should not be disqualified for a future period in exercise of the powers
under Section 76B(2) of THE ACT.
10. The said show-cause notice was challenged by Chaudhary
again by way of another Writ Petition (SCA No. 17826 of 2015) c
unsuccessfully. 7 Chaudhary carried the matter in Letters Patent Appeal
(LPA No.1343/2015) 8 •
11. Eventually, the LPA No.1343/2015 of Chaudhary was allowed
by the High Court on 2.11.2015. The Show-Cause Notice-II was quashed
holding: D
"16. If the impugned order of the learned single Judge is examined
in light of the observations made by us hereinabove, it can be said
that the learned single Judge has committed error in interpreting
the provisions of section 76B(l) and 76B(2) of the Act and the
consequential order for dismissal of the petitioner calls for E
interference.
17. As observed by us, if the second separate show cause notice
is not contemplated as per section 76B(2) of the Act, and both the
consequences should arise in only one proceeding under
proceedings of 76B of the Act, then the fact remains that the F
order for disqualification was quashed by this court without there
being any express liberty reserved for continuation with the
proceedings for disqualification under section 7 6B(2) of the Act.
Therefore, in light of the aforesaid observations and discussions,
it can be said .that the impugned action of issuance of separate
G
'The writ petition was dismissed by a judgment dated 27.10.2015.
'It must be stated for the sake of the completion of the narration of the fact that during
the pendency of the said LPA, the State made an oral application before the Division
Bench to adjourn the matter to enable the Registrar to seek certain clarifications from
the Single Judge. Permission was granted. However, the Single Judge declined to give
any clarification. H
742 SUPREME COURT REPORTS [2017] 6 S.C.R.

A show cause notice for disqualification under section 76B(2) of
the Act is without jurisdiction and beyond the scope of section
76B of the Act.
and therefore concluded:
20. In view of the above, the impugned notice dated 3.10.2015
B (Annexure-F) is quashed being beyond the scope and ambit of
section 76B of the Act. The order of the learned single Judge is
set aside. The appeal is allowed accordingly. Considering the facts
and circumstances, no order as to costs."
12. It can be seen from the above that the High Court held that
c the Show-Cause Notice-II is untenable for the reason that when the
High Court had set aside the Show-Cause Notice-I, it did not record
that the Registrar is permitted to issue a fresh show-cause notice proposing
action under Section 76B(2).
13. Before recording such a conclusion, the High Court rejected
D two submission made on behalf of the Registrar:
(i) that in view of the fact that the earlier order of the Registrar
disqualifying Chaudhary was quashed on the ground ofbreach
of principles of natural justice, it would still be open to the
Registrar to issue show cause notice under Section 76B(2) of
E THE ACT. 9
(ii) Chaudhary is estopped from arguing that the notice under
Section 76B(2) is illegal because in Writ Petition No.9618 of
2015, Chaudhary contended that a composite notice under
Section 76B(l) and (2) proposing to remove Chaudhary from
F office and disqualifying him for a further period from contesting
any election to the Society was illegal.

'In support of that submission, the Registrar relied upon a large number of decisions.
Para 18 of the Judgment dated 02.11.2015 ofthe High Court of Gujarat in LPA No.1343
of 2015: "Mr. Jani, relied upon the decisions of the Apex Court in M/s. Guduthur
G Bros. Vs. The Income-tax Officer, Special Circle, Bangalore, reported at AIR
1960 SC 1326, in Superintendent (Tech. I) Central Excise, I.D.D. Jabalpur and
Others vs. Pratap Rai reported at [(1978) 3 SCC 113). in Anand Narain Shukla vs.
State of Madhya Pradesh reported at (1980) 1 SCC 252, in M.V. Janardhan Reddy
vs. Vijaya Bank and Others reported at ((2008) 7 SCC 738] and in Commissioner
of Sales Tax and others vs. M/s. Subhash and Company reported at AIR 2003 SC
1628 •.• "
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 743
GUJARAT & ANOTHER [CHELAMESWAR, J.]

14. The reasons of the High Court for rejecting the above two A
submissions of the Registrar are recorded at para 18.1 and 19 respectively
as follows:
"18.l As such, the facts of all the aforesaid cases cannot be
equated with the facts and circumstances of the present case as
narrated hereinabove. Further, in view of the interpretation as B
made by us hereinabove, if only one proceeding is contemplated
under section 76B of the Act for two consequences of removal
and disqualification, and those proceedings have ended in SCA
No. 9618 of 2015 and LPA No. 1302 of 2015, it would not be
open to the authority to initiate second proceedings on the same C
facts, more particularly when no express liberty was so reserved
and even otherwise also it could not be reserved in view of the
interpretation made by us hereinabove. Hence, when initiation of
the second. proceedings by issuance of the show cause notice is
beyond the scope of section 76B of the Act, the said decisions
would be of no help to Mr. Jani, learned AAG." D
19. Mr. Jani, learned AAG did attempted to contend that the
appellant in the earlier round of litigation of SCA 9618 of 2015
had contended that separate show cause notice under Section
76B(2) of the Act was required to be issued and not the composite
notice under section 76B(l) & (2) and he further contended that E
learned single judge having accepted the said aspect, it would not
be open to the petitioner to play hot and cold at the same time, and
now to contend that a composite notice was required, more
particularly when the learned single Judge has accepted the said
contention and the said order has been not interfered with in the
LPA." F

15. In the meanwhile on 23. l 0.2015, a notification fixing the dates
for the election to the Managing Committee of the UNION for the tenure
commencing from 2015 to 2020 was issued. Chaudhary filed his
nomination. He was declared elected uncontested on 18.11.2015.
G
16. Aggrieved by the judgment in LPA No.1343 of 2015 dated
2.11.2015 by which the second show-cause notice was quashed by the
High Court, State of Gujarat and others filed SLP(C) No. 32004of2015
(Civil Appeal No.13784 of2015).

H
744 SUPREME COURT REPORTS [2017] 6 S.C.R.

A 17. By an order dated 23.11.2015 of this Court, Chaudhary was
permitted to reply to the second show-cause notice 10 and he did infact
file a reply. Thereupon the Registrar passed an order dated 16.12.2015
disqualifying Chaudhary for a period of six ( 6) years.
"Therefore, I, Nalin Upadhyay (IAS), Registrar of Cooperative
B Societies, Gujarat State, Gandhinagar, in exercise of powers
conferred upon me under section 76(B)(2) of the Gujarat
Cooperative Societies Act, 1961, declare Mr. Vipulbhai
Mansingbhai Chaudhary, the then Chairman, the Mehsana District
Cooperative Milk Producers Union Ltd., Mehsana, as disqualified
to participate in any election or to hold any post in the Mehsana
c District Cooperative Milk Producers Union Ltd., Mehsana and
also any other cooperative organization in the State, for a period
of 6 (six) years from the date of this order."
18. Aggrieved by the same, Chaudhary filed Writ Petition (SCA
No.177 of2016). By the judgment dated 18.01.2016, the same was
D partly allowed by a learned Single Judge:
"26. For the reasons stated above, the impugned order dated
16.12.2015 is quashed only to the extent it imposes period of
disqualification beyond 3 years. Disqualification of the petitioner
under section 76B(2) of the Act for a period of 3 years is not
E disturbed. The petitioner, thus will have to suffer disqualification
under section 76B(2) of the Act for a period of 3 years from the
10
This Court while granting leave in SLP (C) No.33630 of2015 [arising out of the
LPA No.1302 of2015 arising out of WP No. 9618 of2015) filed by Chaudhary
ordered-
F "It has been submitted by the learned senior counsel appearing for the
respondent (Chaudhary) that the reply to the second show cause notice is
being filed today. In these circumstances, we direct that if any order adverse
to the respondent is passed by the Registrar, Cooperative Societies, State of
Gujarat, the same shall not be implemented for a period of four weeks
from the date of communication of the order to the respondent." ·
G By another order dated 26.02.2016, this Court while granting leave in SLP (C)
No.3980 of2016 filed by Chaudhary ordered:
"Leave granted.
List this appeal in the month of August, 2016 for hearing.
No interim relief.
Tag with SLP (C) No.33630 of2015 and connected matters."
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 745
GUJARAT & ANOTHER [CHELAMESWAR, J.]

date of the impugned order. To the extent disqualification is A
imposed beyond 3 years, the petition succeeds. The petition thus
finally stands disposed of accordingly."
19. Challenging the said judgment insofar as it went against him,
Chaudhary carried the matter in LPA No.55 of 2016. A division bench
of the High Court by its judgment dated 28.01.2016 declined to interfere B
with the Single Judge's order.
"17. In view of the aforesaid observations and discussion, we find
that no further case is made out for interference to the view taken
by the learned Single Judge in the impugned order. Hence, the
appeal is disposed off accordingly with no order as to costs." c
Hence, SLP (C) No.3980/2016, now Civil Appeal No.1881 of 2016.
20. Following submissions are made on behalfofChaudhary:
(i) The order of the Registrar dated 10.03.2015 had been set-
aside in part [insofar as it pertained to action under Section
76B(2)] by the High Court in Writ PetitionNo.9618 of2015. D
The same was allowed by the Registrar to become final
without any further challenge. Therefore, Show-Cause
Notice-II could not have been issued in the absence of the
grant of any leave by the High Court to issue a fresh show-
cause notice under Section 76B(2). E
(ii) If Show-Cause Notice-II is illegal, all further action flowing
from show-cause notice-II are void ab initio.
(iii) Assuming for the sake of argument that the Registrar is entitled
to issue show-cause notice-II and take consequential action,
the process of disqualifying Chaudhary invoking power under F
Section 76B(2) is unsustainable, because each one of the acts
or omissions which formed the basis for action against
Chaudhary was either taken by or ratified by the governing
body ("committee") of the society. Therefore, action if at all
required ought to be taken against the entire governing body
of the society under Section 81 but not against individual G
members thereof under Section 76B.
(iv) Alternatively, it is submitted that even if resort to the power
under Section 76B is permissible, show-cause notice-II
narrates the same set of facts and gives the same reasons
H
746 SUPREME COURT REPORTS [2017] 6 S.C.R.

A for action both under sub-sections ( l) and (2) to Section 76B.
Such a course of action is not permissible under law as the
considerations relevant under Section 76B( l) for removing
an office bearer of the society from the office and
considerations which call for disqualifying an office bearer
under Section 76B(2) either from holding any office or
B
contesting an election to the office must necessarily be
different.
(v) Even if action under Section 76B(2) is tenable, the decision
ofthe Registrar to disqualify Chaudhary for six years is wholly
unsustainable because it is not mandatory under sub-section
c (2) to disqualify a person for complete six years in every
case.
(vi) The order under Section 76B(2) must disclose the reasons
which prompted the Registrar to impose a disqualification for
the maximum permissible period of six years. The order is
D absolutely silent in this regard thereby rendering the order
wholly arbitrary.
21. The State of Gujarat and the Registrar submitted:
(i) The Division Bench of the High Court grossly erred in recording
the conclusion that show-cause notice-II is illegal on the ground
E that it was issued without obtaining the leave of the High
Court when it had partially set-aside (in Writ Petition No.9618
of2015) the order dated 10.03.2015.
(ii) Except for the ipsi dixit of the High Court that the Registrar
is required to obtain leave of the Court before issuing show-
F cause notice-II, neither any principle oflaw nor any provision
oflaw which forms the legal basis for such a proposition is
referred to in the impugned judgment.
(iii) In the alternative, it is argued that Chaudhary is estopped
from advancing such an argument in view of the fact he had
G challenged the order of the Registrar dated l 0.03.2015 insofar
as it pertained to Section 76B(2) on the ground that such a
notice could not have been issued in exercise of the power
under Section 768(2) without first recording a conclusion
under Section 768(1) that he was required to be removed
from the office.
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 747
GUJARAT & ANOTHER [CHELAMESWAR, J.)

(iv) The findings recorded by the Registrar after an elaborate A
inquiry, that various charges against Chaudhary are proved,
are findings of fact. Those findings disclose that the various
actions/omissions held proved against Chaudhary are
prejudicial to the interest of the society. Therefore, they rightly
formed the basis for both the actions i.e. removal of
B
Chaudhary from the office as well as the decision to disqualify
Chaudhary under Section 76B(2).
(v) Assuming for the sake of argument that the various actions/
omissions which formed the basis for action against
Chaudhary are either with prior approval or subsequent
ratification of the Committee of the UNION -justifying action C
under Section 81 of THE ACT, law does not prohibit action
against individual members of the Committee. On the other
hand, Section 76B clearly provides for such a possibility.
22. A brief survey of the two provisions of THE ACT is necessary
to examine the various questions involved in these appeals. D
23. Section 76B provides for (i) removal of"any officer"; and (ii)
disqualification of such a removed officer to hold or contest election to
any office either of that Society or any other Society for a certain period.
"76B. Removal of officer-(i) If, in the opinion of the Registrar,
any officer makes persistent default or is negligent in performance
of the duties imposed on him by this Act or the rules or the bye- E
laws or does anything which is prejudicial to the interests of the
society or where he stands disqualified by or under this Act, the
Registrar may, after giving the officer an opportunity of being
heard, by order remove such officer and direct the society to
elect or appoint a person or a qualified member in the vacancy F
caused by such removal and the officer so elected or appointed
shall hold office so long only as the officer in whose place he is
elected or appointed would have held if the vacancy had not
occurred.
(2) The Registrar may, by order, direct that the officer so removed G
shall be disqualified to hold or to contest election for any office in
the society from which he is removed and in any other society
for a period not exceeding six years from the date of the order
and such officer shall stand disqualified accordingly."
24. Section 81 authorises (i) the supersession of the Committee
of a Society; and (ii) appointment of a substitute committee or an H
748 SUPREME COURT REPORTS (2017] 6 S.C.R.

A administrator to manage the affairs of the society and various things
incidental thereto. Section 81 insofar as it is relevant for our purpose
reads as follows:-
"Section 81(1) If in respect of a committee of a society having
the Registrar as its member, the State Government and in respect
B of a committee of a Society which does not have the Registrar as
its member, the Registrar, is of the opinion that;
(i) the committee persistently makes default; or
(ii) the committee is negligent in the performance of its duties
imposed on it by or under this Act or the rules made thereunder
c or the bye-laws; or
(iii) the committee has committed any act prejudicial to the interest
of the society or its members;
the State Government or, as the case may be, the Registrar, after
D giving the committee an opportunity of being heard, within fifteen
days from the date of issue of notice, by an order in writing,
supersede the Committee and appoint-
(a) a Committee, consisting of one or more members of the society,
not being the members of the committee superseded under
this sub-section, or
E
(b) an Administrator from amongst the officers of the Cooperation
Department of the State Government -
to manage the affairs of the society for a period not exceeding
one year as may be specified in the order, which period may, at
F the discretion of the State Government or the Registrar, as the
case may be, be extended from time to time, so, however, the
term of the Committee or the Administrator shall be, the remaining
term of the committee in whose place he is appointed or two
years in aggregate, whichever is less."
G 25. The expressions "committee", "officer'' and "society" are
defined expressions under Section 2(5), 2(14) and 2(19) of THE ACT:
"Section 2(5) "committee" means the Managing Committee or
the governing body of a society to which the direction and control
of the management of the affairs of a society is entrusted to;
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 749
GUJARAT & ANOTHER [CHELAMESWAR, J.]

Section 2( 14) "officer" means a person elected or appointed by a A
society to any office of such society according to its bye-laws;
and includes a chairman, vice-chairman, president, vice-president,
managing director, manager, secretary, treasurer, member of the
committee, and any other person elected or appointed under this
Act, the rules or the bye-laws, to give directions in regard to the B
business of such society;
Section 2(19) "society" means a co-operative society registered,
or deemed to be registered, under this Act;"
Further analysis of Sections 76B and 81 would be undertaken in
the judgment at the appropriate place. c
26. It was in exercise of the power under Section 76B. Action
was initiated against Chaudhary initially by issuing Show-Cause Notice-
! which culminated in a final order dated 10.3.2015 by which Chaudhary
was removed from the office of the Chairman of the UNION and also
disqualified for a. period of three years from holding any office or to D
participate in any election "in any sahakari mandal". 11
27. The conclusions recorded by the Registrar, in the order of
dated 10.3.2015 removing Chaudhary from office, remained undisturbed
by the High Court, in Special Civil Application No.9618/2015. The High
Court recorded (See paras 11 to 15 of the judgment) that of the various E
charges leveled against Chaudhary, i.e. Charges Nos.2, 3, 6, 9, 10 and
11 had been held proved by the Registrar. The High Court further held
that such findings could not be determined in exercise of the jurisdiction
under Article 226 of the Constitution of India.
"16. The Court finds that in the nature of charges proved, the
F
view taken by respondent No.2 and affirmed by the Revisional
Authority is not to be disturbed in exercise of the powers under
Article 226 of the Constitution oflndia in absence of any complaint
as regards decision making process. It is not disputed that fair
and sufficient opportunities were given to the petitioner and
therefore, no complaint could be made as regards decision making G
process to arrive at a decision by respondent No.2 to remove the
petitioner in exercise of powers under Section 76B(l) of the Act."
"SeeFIN5
In view of the subsequent development, it is not necessary for us to examine
the meaning of the expression "sahakari mandal". H
750 SUPREME COURT REPORTS (2017] 6 S.C.R.

A The said view of the learned Single Judge was endorsed by the
Division Bench in Letters Patent Appeal No.1302/2015. The Division
Bench in its judgment dated 19.10.2015 held as follows:
"3. Mr. Thakore, learned senior counsel appearing for the appellant,
during the course of the hearing has taken us to the impugned
B order passed by the authority for removal, which was subject
matter of the petition before the learned Single Judge. There are
findings recorded by the authority pertaining to persistent default
in performance of the duty by the appellant. Those findings have
been examined by the learned Single Judge to the extent of scope
ofjudicial review in a petition under Article 226 of the Constitution.
c It is hardly required to be stated that while undertaking the exercise
ofjudicial review under Article 226 of the Constitution in a matter
of removal of an office bearer of the society under the Act, the
Court would examine as to whether the opinion arrived at for
removal is supported by objective material or not. Sufficiency of
D the material may not be re-assessed by the Court nor this Court
would reappreciate the material and record a different finding as
that of the appellate court. After having expressed the view for
the scope ofjudicial review, when we have considered the contents
of the impugned order passed by the learned Single Judge, it
appears that no error has been committed by the learned Single
E Judge in affirming or not interfering with the order passed by the
authority under Section 76B(l) of the Act for removal of the
appellant as Chairman of the Milk Producers Union."
28. Civil Appeal No.14678 of 2015 (Arising out of SLP(C) No.
33630 of 2015] challenging the correctness of the above-mentioned
F judgment of the High Court is one of the three appeals before us. 12
Therefore, it is a submission of Chaudhary that we are required to examine
the correctness of the conclusion recorded by the Registrar that the
charges 2, 3, 6, 9, 10 and 11 are framed against Chaudhary.
In substance, the argument is that this Court should act as the
G appellate Court to determine the correctness of the conclusion drawn on

12In our opinion, LPA No.1302/2015 ought to have been dismissed on the simple
ground that the said appeal had become infructuous. Because admittedly the tenure of
Chaudhary as Chairman of the Society expired on 01.05.2014. Therefore, SLP (Civil)
No.33630/2015 was a futile exercise. We only wonder as to how leave came to granted
H in the said SLP.
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 751
GUJARAT & ANOTHER [CHELAMESWAR, J.]

the basis of the evidence before the Registrar. An exercise which ought A
not to be normally undertaken even by the High Courts in the jurisdiction
under Article 226 of the Constitution of India nor by this Court on further
appeal by leave under Article 136 of the Constitution.
29. The High Court rightly declined to interfere with those findings.
We see no error in the decision of the High Court in this regard. B
We decline to undertake the exercise of examining the correctness
of the conclusions recorded by the Registrar.
30. The order dated 10.3.2015 insofar as it pertained to the future
disqualification of Chaudhary was set aside in Writ Petition No. 9618 of
2015. c
It was argued on behalf of Chaudhary that issuance of a combined
notice proposing action both under sub-sections (1) and (2) of Section
76B is illegal. Action under sub-section (2) of Section 76B could be
initiated only after conclusion of the action under Section 76B(1). 13
In terms of submission of Chaudhary, the learned Single Judge D
formed the points for determination at para 20. 14
On the construction of Section 76B, the learned Single Judge held
as follows:
"21 .... There is no concept of issuing notice in advance. If such
E
notice in advance is issued for the proposed action to follow the
event to happen, it could be said that the action proposed is
prejudged, predetermined and as a result of bias attitude. In fact,
reading the language of sub-sections (l) and (2) of Section 76B
of the Act independently, one would find that the legislature
F
13
"Para 19 .... the contentions raised on behalf of the petitioner are that there was no
notice in the eye of law for proposed action of disqualification and that it would be
only after order for removal is passed, the action under Section 76B(2) of the Act could
be taken and therefore, issuance of the combined notice under Section 76B(1) and (2)
of the Act was not permissible.... "
""Para 20 .... Therefore, in the context of the provision of Section 76B of the Act, the
G
Court needs to examined whether before the order of removal could be made, action for
disqualification under sub-section (2) could be initiated and whether separate order is
required for disqualification under sub-section (2) after serving the order of removal to
the petitioner and whether mere reference to Section 76B(2) in the show cause notice
for removal could be said to be notice for proposed action of disqualification under sub-
section (2)." H
752 SUPREME COURT REPORTS [2017] 6 S.C.R.

A intended to pass two different and distinct orders at two different
stages. In both the sub-sections, the words "by order" are used.
Therefore, removal of an officer is contemplated by order to be
passed at first in point of time and then by separate order, the
Registrar may direct that the officer "so removed" shall be
disqualified to hold or to contest election for any office in his own
B
society or in any other society for a period which may be fixed by
the Registrar within the ceiling limit and for such order to be
separately passed, principles of natural justice, as stated above,
are to be followed."

c notice The learned Single Judge, therefore, concluded that a combined
under sub-sections (1) and (2) of Section 76B is untenable.'5
31. The High Court also examined the question (on the assumption
that even if a combined notice is not objectionable) whether a combined
notice issued to Chaudhary complied with the principles of natural justice
and concluded that Chaudhary was "not asked to show-cause as to why
D he should not be disqualified". 16
32. The State of Gujarat and the Registrar accepted the said
judgment and let it become final.
33. Hence, the submission of Chaudhary both before the High
E Court and this Court that Show-Cause Notice-II could not have been
issued without obtaining the leave of the High Court. Such a submission
found favour with the High Court in the judgment in LPA No. 1343 of
2015 when it was called upon to determine the legality of Show-Cause
Notice-II.

F ""Para 26 .... Therefore, if separate order is to be made only after the order of removal
is passed, there is no question of issuing any notice proposing disqualification with
notice for removal. The Court, therefore, finds that action taken for disqualification of
the petitioner mns counter to the provisions of sub-section (2) of Section 76B of the
Act."
"Para 27 .... whether there was in fact a notice in the eye of law for proposed action of
G disqualification. The show cause notice at Annexure-A is titled as 'Show Cause Notice
under Section 76(B)(l)(2) of the Act'. However, in the language of the notice at
Annexure-A, the petitioner was asked only to show cause why he should not be
removed from the office of Chairman, and while asking the petitioner to show cause
against the proposed action of removal, sub-section (2) is mentioned with sub-section
(I) of Section 76B of the Act. The petitioner is thus not asked to show cause as to why
he should not be disqualified after his removal from the office of Chairman."
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 753
GUJARAT & ANOTHER [CHELAMESWAR, J.]

34. The High Court did not assign any reason for such a conclusion A
nor any provision oflaw or precedent which warrants such a conclusion
is referred to. We find it difficult to sustain the conclusion.
35. Any statutory power could "be exercised from time to time as
occasion requires". Such a principle is recognised by Section 14 17 of
the General Clauses Act, 1897 and Section 1418 of the Gujarat General B
Clauses Act. Power conferred on Courts to adjudicate the rights and
obligations of the parties is an exception to the principle. The doctrines
of res-judicata 19 and double jeopardy20 prohibit the repeated invocation
of the jurisdiction of the Civil Courts or repeated attempts to prosecute a
person on the same set of facts constituting an offence. Whether power
conferred by a statute on a body other than a judicial body (i) could be c
exercised repeatedly? or (ii) are there any legal limitations thereon? arid
(iii) if there are limitations thereon what are they? are questions which
require further examination. But for the purpose of this case these
questions need not be examined. It is already held by this Court that
D
17
Section 14. Powers conferred to be exercisable from time to time.- (I) Where,
by any Central Act or Regulation made after the commencement of this Act, any power
is conferred, then unless a different intention appears, that power may be exercised
from time to time as occasions requires.
(2). This section applies also to all Central Acts and Regulations made on or
after the fourteenth day of January, 1887. E
"Section 14. Powers conferred on any Government to be exercisable from time
to time.- Where, by any Bombay Act or Gujarat Act made after the commencement of
this Act, power is conferred on any Government then that power may be exercised
from time to time as occasion requires.
"Embodied in Section 11 of the Code of Civil Procedure, 1908.
F
'"Contained in Article 20(2) of the Constitution oflndia and Section 300 of the Code
of Criminal Procedure, 1973.
Constitution of India
Article 20. Protection in respect of conviction for offences.- (2) No person
shall be prosecuted and punished for the same offence more than once
The Code of Criminal Procedure. 1973
Section 300. Person once convicted or acquitted not to be tried for same offence.- G
(!) A person who has once been tried by a Court of competent jurisdiction for an
offence and convicted or acquitted ·of such offence shall, while such conviction or
acquittal remains in force, not be liable to be tried again for the same offence, nor on
the same facts for any other offence for which a different charge from the one made
against him might have been made under sub- section (I) of section 221, or for
which he might have been convicted under sub- section (2) thereof.
H
754 SUPREME COURT REPORTS [2017] 6 S.C.R.

A where an order passed in exercise of a power conferred by a statute is
set aside on the ground that such an order was passed in breach of the
principles ofnaturaljustice, the power could once again be exercised by
complying with the principles of natural justice.
36. A Division Bench of the Andhra Pradesh High Court in
B Thimmasamudram Tobacco Co. v. Assistant Collector of Central
Excise, Ne/lore Division, Nellore, AIR 1961 AP 324, held that:
" ... in a case where the flaw in the order appealed against consists
of in the non-observance of certain procedure.or in not giving
effect to the maxim 'audi alteram partem', it is open to the officer
c concerned to start the procedure once again with a view to follow
the rules of procedure and the principles of natural justice."
The said principle laid down by the Andhra Pradesh High Court
was approved by this Court in Superintendent (Tecli.J) Central Excise
J.D.D. Jabalpur & Others v. Pratap Rai, ( 1978) 3 SCC 11321
D 37. Inspite of the fact that the abovementionedjudgment of this
Court was cited, the Division Bench of the High Court in L.P.A. No.1343
of 2015 quashed the show-cause notice-II dated 03.10.2015 on the
ground:

21 Superintendent (Tech.I) Central Excise l.D.D. Jabalpur & Others v. Pratap Rai,
E (1978) 3 sec 113
"Para 6. In the case ofThimmasamudram Tobacco Co. v. Assistant Collector ofCentral
Excise, Ne/lore Division, Ne/lore [AIR 1961 AP 324] while construing the provisions
of the Central Excise and Salt Act which was almost on identical terms as the Customs
Act, a Division Bench of the Andhra Pradesh High Court observed as follows (AIR p.
325, para 11 ):
.F
"Assuming that Section 35 of the Central Excise Act does not clothe the appellate
authority with power to remand the matter to the officer whose order is appealed
against, nothing stands in the way of the Assistant Collector initiating the
proceedings afresh, when his order was quashed not on merits but on technical
grounds i.e. for not following either the procedure_ or the dictates of natural
justice. In a case where the flaw in the order appealed against consists of in the
G non-observance of certain procedure or in not giving effect to the maxim 'audi
alteram partem', it is open to the officer concerned to start the procedure once
again with a view to follow the rules of procedure and the principles of natural
justice."
We find ourselves in complete agreement with the view taken by the Andhra Pradesh
High Court and the observations made by Reddy, C.J. who spoke for the Court."
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 755
GUJARAT & ANOTHER [CHELAMESWAR, J.]

" ... Further, in view of the interpretation as made by us A
hereinabove, if only one proceeding is contemplated under section
76B of the Act for two consequences of removal and
disqualification, and those proceedings have ended in SCA No.
9618 of2015 and LPANo. 1302 of2015, it would not be open to
the authority to initiate second proceedings on the same facts, B
more particularly when no express liberty was so reserved and
even otherwise also it could not be reserved in view of the
interpretation made by us hereinabove ... ".
The said conclusion is clearly untenable and is required to be set-
aside and the first submission ofChaudhary is liable to be rejected. As a
consequence, the second submission also falls to ground. c
38. We shall now deal with the third submission of Chaudhary.
The submission in substance is that the acts and omissions which formed
the basis of allegations leading to action against Chaudhary under Section
76B are not the individual acts of Chaudhary but the collective acts or
omissions of the Committee of the UNION. Therefore, action if at all D
required must be taken under Section 81 against the entire Committee
but not only against Chaudhary. In absence of any action against the
Committee, action against Chaudhary is illegal and unsustainable.
39. The text of both the Sections 76B and 81 is already taken note
of. Section 81 authorises the supersession of the Committee of a Society. E
Section 76B authorises action against individual officers of a Society. In
either case, action is required to be taken upon the formation of the
opinion by the Registrar22 that (i) there is a persistent default; or (ii)
negligence in the performance of duties; or (iii) commission of an act
which is prejudicial to the interest of the Society or its members.
40. Committee of a cooperative society by definition23 is a body F
to which "the direction and control of the management of the affairs of
a Society is entrusted to" - though under Section 73 of THE ACT, the
final authority of every Society shall vest in the general body of members.
Section 7424 declares that the management of every society shall vest in
22 Or the Government in certain cases the details of which may not be necessary for the G
present purpose.
23See Section 2(5) in para 25 (supra)
"Section 74. Committee, its powers and functions.--(!) The management of every
society shall vest in a committee. constituted in accordance with this Act, the rules and
bye-laws, which shall exercise such powers and perform such duties as may be conferred
or imposed on it respectively by this Act, the rules and the bye-laws. H
756 SUPREME COURT REPORTS [2017] 6 S.C.R.

A a committee constituted in accordance with THE ACT etc. The Section
also declares that the committee shall "exercise such powers and perform
such duties" (hereafter collectively - DUTIES) as may be conferred or
imposed on it by THE ACT or the subordinate legislation made thereunder.
Performance of DUTIES normally obligates a committee to take or
B desist from taking certain courses of actions. Failure of committee to
perform its DUTIES attracts various legal consequences specified under
THE ACT. One of the consequences is specified under Section 81.
41. Committee is nothing but a collective name for the
conglomeration of the individual officers of the society. An "officer" by
definition25 is either a person elected or appointed under THE ACT, or
c the subordinate legislation made thereunder to give directions in regard
to the business of such society. ·
42. Committees are inanimate bodies. They function through human
agency i.e. the individual members of the Committee. When it is said
that a committee failed to perform its DUTIES under THE ACT, it is
D essentially the failure of the officers of the society collectively.

Failure of the Committee to perform its DUTIES necessarily
implies failure on the part of the majority (if not the entire body) of the
members of the Committee to perform DUTIES which they are obliged
to perform under THE ACT in their capacity as the members of the
E Committee.
Acts or omissions ofindividual members which are not consistent
with the DUTIES of the Committee or individual members entail various
legal consequences specified under THE ACT both to the individual
members and the Committee.
F
Individual members of the Committee owe DUTIES some of which
are required to be performed individually2 6 and others in concert with
the other members of the Committee.
43. Committee by definition owes a duty to give directions in regard
G to the business of the society. That DUTY of the Committee in substance

25 See Section 2(14) in para 25 (supra)

26 An officer is obliged to attend the meetings of the Committee and participate in the

decision making process. Failure to attend and participate in such meetings may attract
legal consequences - if so prescribed by THE ACT or subordinate legislation made
H thereunder.
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 757
GUJARAT & ANOTHER [CHELAMESWAR, J.]

is the DUTY owed by the individual members of the Committee A
collectively. The legality of the directions given depends upon the nature
of the various DUTIES to be performed by the Committee. Failure to
give directions may also constitute an illegal omission (failure to perform
a DUTY) in a given case.
In a given case, if a decision taken by the committee is so patently B
prejudicial to the interest of the society calling for action under Section
81, there is a collective failure of the individual members of the committee
to perform their respective duty to give right directions in regard to the
business of the society. Registrar is authorised to supersede the
committee and appoint an administrator. If such course of action is
proposed by the Registrar, it will not be open to an individual member of C
the committee to argue that he was not a party to such an objectionable
conduct of the committee because either he abstained from the decision
making process or disagreed with the objectionable course of action
taken by the other (majority) members of the committee and therefore,
there is no individual culpability on his part. Section 81 of THE ACT D
authorises collective action against all the members of the committee.
The collective failure of the committee in performing its duty is such that
warrants supersession of the committee. All individual officers lose their
offices irrespective of their contribution to the culpable action of the
committee. Even in such cases of the failure of the committee to perform
a DUTY owed by it, it may not be necessary to supersede the entire E
committee (in a given case) if it can be ascertained that the failure
occurred due to culpable act or omission ofan individual member of the
committee and other members though acquiesced, did not have any
culpable motives.
In a given case an act or omission of the committee may also F
constitute a failure of the performance of duty on part of each individual
member of the committee, who contributed to such failure of duty. Law
can provide for action to be taken against each of the members of the
committee. In such a case whether it is compulsory to take action against
all the members who contributed to the culpable action is a matter which G
depends upon the scheme and tenor of the law.
Sections 76B and 81 provide for such a courses of action. The
Registrar is conferred with a discretionary power to take action against

H
758 SUPREME COURT REPORTS [2017] 6 S.C.R.

A officers/members of the Committee individual or against the Committee
collectively.
It is essentially for the Registrar to make an assessment whether
on the facts and circumstances of each case either action is to be taken
against the committee or an individual officer'or both. The decision of
B the Registrar taken in exercise of such discretionary power woUld not
be amenable to challenge on the ground that the Registrar failed to take
action under both Sections 76B and 81 unless the individual member
against whom action is proposed pleads and proves ma la fide. Individual
members cannot complain that since the Registrar is not proposing action
collectively against the committee, he could not initiate action against
c individual members of the Committee.
44. In substance, THE ACT envisages joint and several action
against the officers in their capacity as members of the committee. While
Section 81 is designed to deal with the dereliction of the duties by the
committee as a body, Section 76B deals with the dereliction of duties of
D the individual members of the committee. The Registrar is invested by
THE ACT with the discretion to choose the proper course of ac~ion
depending upon the situation. The argument ofChaudhary is not that the
Registrar abused his discretion. The submission is that it is not permissible
for the Registrar to resort to action only under Section 76B. We reject
E the submission.
45. We shall now examine the fourth submission of Chaudhary
that the reliance upon the same set of facts in both Show-Cause Notices-
! and II would render the Show-Cause Notice-II and the action
consequent thereupon illegal.
F At the outset, we must state that we have examined the tenor of
both the show-cause notices and we proceed on the basis that the tenor
of both of them is substantially the same if not identical.
46. Section 76B( I) contemplates removal of an officer of a society
ifthe Registrar is satisfied that such an officer is guilty of any one of the
G misconducts specified under the section. Sub-section (2) further
authorises the· Registrar to disqualify such an officer either to contest or
to hold any office in that society from which the officer is removed and
also in any other society for a period to be specified by the Registrar
subject to a statutory outer limit.
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 759
GUJARAT & ANOTHER [CHELAMESWAR, J.]

From the language of sub-section (2), it appears to us that the A
Registrar is not obliged to-disqualify every officer against whom an order
ofremoval under Section 76B(1) is passed. Going by the text of sub-
section (2) which says that the ''Registrar may ... direct that the officer
so removed shall be disqualified ..... ", the power to disqualify is
discretionary.
B
The basic requirement of sub-section (2) is that the power
thereunder could be exercised only against an officer of a society who
has already been removed from office. Therefore, the factual basis on
which the action under sub-section ( 1) and sub-section (2) of Section
76B is to be taken is bound to be the same though the reasons and logic
on the basis of which action under either of the sub-sections is to be C
taken could be different. Depending upon the intensity and gravity of
the misconduct in a given case, mere action [under Section 76B(l)] of
removal from office might suffice and meet the ends ofjustice. Whereas
in some cases action under both the sub-sections might be called for.
But in no case action only under Section 76B(2) is permissible without D
taking action under Section 76B(l ). It is also possible that in a given
case, facts may not only justify but also oblige the Registrar to pass not
· only an order of removal under sub-section ( 1) but also an order of
disqualification under sub-section (2) depending upon the nature.of the
misconduct and the legal obligation flouted by the officer.
E
It all depends upon the facts and circumstances of each and every
case and the scheme of the law relevant to such facts.· The variables
are too many.
47. On the facts of the present case, Chaudhary is found liable to
be removed from office on various charges which according to the
Registrar tantamount to (i) negligence on the part of Chaudhary in F
performance of his duties under THE ACT or the subordinate legislation
therein, and (ii) indulgence in acts which are prejudicial to the UNION.
Such conclusions are based on an inquiry where evidence was
gathered. The order of the Registrar dated 10.3.2015 by which
Chaudhary was removed from office of the ~hairman,of the Society G
was approved by the State Government (Revisionary Authority under
THE ACT). Chaudhary unsuccessfully questioned the same in Writ
Petition No. 9618 of2015. The further challenge ofChaudhary was
rejected in LPANo. 1302 of2015. 27
27
The details of which are discussed by us in Paragraphs 27 and 28 supra. H
760 SUPREME COURT REPORTS [2017] 6 S.C.R.

A 48. For the purpose of passing the order of disqualification under
Section 76B(2) against Chaudhary, the Registrar rightly proceeded on
the basis that there is an earlier order of the Registrar dated 10.3.2015
where charges against Chaudhary had been held proved and the High
Court declined to interfere with those findings. He, therefore, opined
B that he is entitled to proceed to take action under Section 76B(2) on the
basis of the same conclusions which rendered Chaudhary liable for
removal from office under Section 76B(l). In the process; both in the
show-cause notice-II and the order dated 16.12.2015, the Registrar once
again repeated all the allegations which formed the basis for the order
under Section 76B(l).
c In our opinion, it was not really necessary. It would have sufficed
if the Registrar mentioned the fact that Chaudhary was removed from
the office of Chairman of the Society in exercise of the power under
Section 76B(l)-the mention of such a fact is also not mandatory. It is
only a condition precedent for initiating action under Section 76B(2).
D The requirements of valid notice under Section 76B(2), in our opinion,
are that the notice should indicate broadly the reasons which prompt the
Registrar to initiate action and the period for which the person, against
whom the action is initiated, is proposed to be disqualified. However,
the mentioning of the past history though avoidable does not in any way
vitiate the show-cause notice or the final order if they are otherwise in
E accordance with law.
49. In our opinion, there is no legal infirmity either in the logic
adopted by the Registrar or the action taken by him under Section 76B(2)
on the ground that the Registrar relied upon the same set of facts and
the conclusions drawn thereupon for taking action both under Section
F 76B(l) and Section 76B(2).
In Show-Cause Notice-II, it is indicated that Chaudhary is proposed
to be disqualified under Section 76B(2) on the ground he "committed
serious type of administrative and financial irregularities as a consequence
thereof, the Sangh28 has suffered financial loss on large scale ..... " - a
G statement made on the basis of the previous history of the litigation. It
further indicated in the Show-Cause Notice that the Society of which
Chaudhary was the Chairman is the largest UNION of the State with
4.5 lakhs milk producers who are members of 1097 milk producers

28
Society
H
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 761
GUJARAT & ANOTHER [CHELAMESWAR, J.)

cooperative societies29, therefore, there is a need to disqualify Chaudhary A
from holding or contesting for any post in any society.
The mention of the facts
(i) That on account of the misconduct ofChaudhary, the UNION
suffered financial loss on a large scale;
(ii) That the UNION consists of various smaller societies each B
of which has a large number of milk suppliers; and
(iii) That the Registrar's proposed to disqualify Chaudhary for
maximum period of six years,
in our opinion, makes the Show-Cause Notice-II sufficiently
compliant with the requirement of Section 76B(2). C
50. The final order disqualifying Chaudhary was passed after due
compliance with the principles of natural justice. If the Registrar came
to the conclusion that Chaudhary should not be permitted to contest any
election or hold any office in any society functioning under THE ACT,
the same, in our view, can't be found fault with. Because Chaudhary D
has already been found guilty of conduct which resulted in a large scale
financial irregularities in the conduct of the business of the society and
also financial loss to the society. The activity of the UNION is spread
over in three districts. The UNION consists of a large number of primary
societies. Disqualifying Chaudhary only from the holding post in the
UNION is to give him a chance to meddle with the affairs of the societies E
which are members of the UNION.
51. The only other question remaining to be examined is whether
the period of disqualification of six years is consistent with law.
Section 76B(2) as of today provides for disqualification of an
officer for a period not exceeding six years. Originally the Section provided F
for disqualification only for four years. But the "four years" period was
substituted by "six years" period by the Gujarat Co-operative Societies
(Amendment) Act, 2015 (Act No.12 of2015).
29
The Mehsana Jilla Sahakari Dudh Utpadak Sangh Limited is the largest Union of the
State with which, larger interest of about more than 4.50 lacs milk producers and 1097 G
milk producers cooperative societies is connected. In such circumstances, it is appearing
· proper that you are not only removed from the office bearer in the cooperative
movement but to see that you may not participate in such activity and the damage is
not caused to the cooperative establishment because of your such activity, it is necessary
to keep you away from assuming the office in any cooperative establishment by
participating in the election maximum for a period of six years.
H
762 SUPREME COURT REPORTS (2017] 6 S.C.R.

A 52. All the acts and omissions which formed the basis for action
against Chaudhary pertained to the period anterior30 to the Act No.12 of
2015. Under Section 7 of the Gujarat General Clauses Act, it is provided
that where an enactment is repealed by a subsequent enactment, the
repeal does not normally affect any investigation or legal proceedings in
respect of any right, privilege, obligations, liability, penalty, forfeiture or
B
punishment and any legal proceeding initiated during the currency of the
repealed enactment could be continued as if the repealing Act has not
been passed.
Repeal could be either of the entire enactment or a part of it.
Substitution of parts of an enactment is nothing but pro tan to to repeal
c those parts.
Normally when an enactment is repealed, any action initiated under
that enactment dealing its currency should lapse. Because the authority
of law for action initiated under an enactment ceases to exist on its
repeal rendering the continuation of action without authority of law. To
D · meet such a contingency, the General Clauses Act made a provision
under Section 7. It seeks to preserve various rights and obligations
acquired or incurred under repealed enactments. It also provides for
various other things jncidental. to preservation of such rights and
obligations 31 _.
E 36
Show-Cause Notice-I is dated 12.1.2015 and the Act No.12 of2015 came into force
on 7'' April 2015.
31
Section 7 of The Gujarat General Clauses Act, 1904:
"Section 7. Effect of repeal.- Where this Act, or any Bombay Act or Gujarat Act made
after the commencement of this Act, repeals any enactment hitherto made or hereafter
to be made, then unless a different intention appears, the repeal shall not-
F (a) revive anything not in force or existing at the time at which the repeal takes effect;
or
(b) affect the previous operation of any enactment so repealed or anything duly done
or suffered thereunder; or
(c) affect any right, privilege, obligation or liability acquired, ac;cun;d or incurred under
any enactment so repealed; or
G (d) affect any penalty, forfeiture or punishment incurred in respect of any offence
committed against any enactment so repealed; or
( e) affect any investigation, legal proceeding or remedy in respect of any such right,
privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any
such investigation, legal proceeding or remedy may be instituted, continued or enforced,
and any such penalty, forfeiture or punishment may be imposed, as ifthe repealing Act
H had not been passed."
VIPULBHAI MANSINGBHAI CHAUDHARY v. STATE OF 763
GUJARAT & ANOTHER [CHELAMESWAR, J.]

53. As a logical corollary to the above proposition, no right or A
liability can be created by a repealing enactment, which is inconsistent
with the rights and obligations conferred under the repealed Act unless
the repealing enactment makes an express declaration to that effect or
adopts some other technique known to law to achieve that purpose.
Giving retrospective effect to the repealing enactment is one of the B
techniques by which the legislature seeks to achieve that purpose.
54. There is nothing in Act No.12 of 2015 which warrants an
interpretation that the legislature intended to create a disqualification
which would run for a maximum period of six years with retrospective
effect. The learnedAdditional Solicitor General Shri Mehta fairly accepted
it. In the circumstances, the disqualification of six years upon Chaudhary C
is not tenable and at best Chaudhary could ,be disqualified for a maximum
period of four years.
55. It is next argued on behalf ofChaudhary that the order dated
12.10.2015 does not disclose reasons which prompted the Registrar to
impose the maximum penalty and, therefore, that order is vitiated. We D
do not wish to examine the submission for the reason the judgment under
appeal thought it fit that disqualification of Chaudhary for a period of
three years would meet the ends of justice. We are of the opinion that
· having regard to the acts and omissions ofChaudhary forming the basis
of disqualification cannot be said to be unreasonable. · E
56. In the result, appeals of Chaudhary fail and appeal of the
State is disposed of in terms of the above:
Writ Petition (Civil) No.824of2015 filed by Chaudhary is dismissed ·
as not pressed.
F
In the facts and circumstances of the case, there will be no order
as to costs.
Divya Pandey Matters disposed of.