Multi-state coop society can't take over state coop society: Guj HC

A multi-state cooperative society registered under the Central Act cannot takeover a cooperative society registered under a State Act, held the Gujarat High court, early this week.

The Court was dealing with a case where a petitioner had challenged order of a single judge of High Court rejecting his plea against notice of auction of his property mortgaged with a state cooperative bank, that was later acquired by a multi-state cooperative bank.

Division bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala were deciding on point whether a multi-state cooperative bank registered under Multi-State Cooperative Societies Act, 2002, having taken over a cooperative bank registered under Gujarat Cooperative Societies Act, 1961, could legally enforce a money decree under provisions of the State Act.

"Section 17 of the Multi-State Cooperative Societies Act does not permit or empower a Multi-State Cooperative Society to take over any cooperative society," the court observed in its order.

"This aforesaid fact is also confirmed by the Reserve Bank of India in its Circular dated February 2, 2005, saying that there are no specific provision in the State Acts or the Central Act for the merger of a cooperative society under the State Acts with that under the Central Act," it added.

The court ruled in favour of the petitioner and held that the multi-state cooperative bank had no power to proceed with the auction of the petitioner's property. It also set aside the order of the single judge.

According to case details, the petitioner, Jagdhish Rochani, had taken a loan of Rs 7 lakh in 1999 from one Unnati Cooperative Bank Limited (UCBL), registered under the Gujarat Cooperative Societies Act, 1961. Since, Rochani was not able to pay the monthly installments, the UBCL had attached his property.

The UCBL later in 2006 got merged with Cosmos Cooperative Bank Limited (CCBL), a multi schedule bank registered under the Multi-State Cooperative Societies Act, 2002. CCBL in September 2009 issued notice for auction of Rochani's property as he had defaulted on monthly repayments. Following this Rochani approached the court and challenged the auction notice on the ground that the he had obtained loan from UCBL, a bank registered under Gujarat Cooperative Societies Act, 1961, and not from CCBL a multi-state cooperative bank.

Hence, provisions of a Multi-State Cooperative Societies Act, 2002 would apply in his case.

However, a single judge had ruled against Rochani, following which he had appealed against the order before a division bench of High Court.

Guj HC notice to Essar Oil over PIL alleging illegal construction

The Gujarat High Court today issued notice to Essar Oil Ltd (EOL) over a public interest litigation (PIL) alleging that the company was illegally constructing a residential colony for its staff in Vadinar block of Jamnagar district. The Compay's oil refinery is also located in the same block. The PIL further alleged that the construction activity was on without obtaining requisite permission from the district authorities.

A division bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala has issued notice to EOL and asked it to file its reply to the allegations made in the PIL. It has also asked the state government and the Jamnagar district collector to explain the legal position of the residential complex being built by the company. It, however, declined to stay the construction activity of the company as demanded in the PIL. The matter is posted for further hearing after two weeks. The PIL was filed by Shamji Chavda, a resident of Bharana village in Jamnagar through his lawyer Vijay Nangesh, who argued that law of land should be same for all.