Decided on December 28,1979

Apexa Co Operative Bank Limited Appellant


P.D.DESAI - (1.) The brooding omnipresence of the rule of natural justice audi alteram partem sanctified constitutionally in the great equalizing principle enunciated in Article 14 pervades in varying forms and flexible moulds every administrative action in our republic unless a validly enacted law excludes it. The rule which mandates that no one shall be condemned unheard has very often been regarded as anathematical by administrators involving as it does the irritating inconvenience of notice and opportunity. Yet jurists and judges with their inveterate zeal to invest law with fairness and to secure justice have over the years reaffirmed that principle in diverse situations. These contrary approaches have given rise to a plethora of decisions which has crystallized the content and reach of this great humanizing principle but in its application to concrete cases perplexing problems often arise especially when there are no positive words in the statute applicable to the situation requiring that the party likely to be affected shall be heard. The person hurt persuasively pleads in such a case that the omission of the Legislature is unintentional and that informed as it was of the great stride taken by judicial pronouncements in invigorating and expanding the doctrine of fair play in action it has left it to the Court to supply the omission by necessary implication. The authority on the other hand strenuously submits that the exclusion is meaningful and that fairness in action does not demand its implication having regard to the nature of action to be taken its object and purpose and the scheme of the relevant statutory provisions. This dispute with its contradictory and conflicting pulls is not easy of solution especially when the subject-matter falls within the amber areas of natural justice where the case law lays down no clear cut formula applicable in a free zone where pitfalls vie with milestones. The instant case falls within that twilight zone and the dilemma is : Is the rule of fair play in action excluded when in exercise of the statutory powers and upon fulfilment of the statutory conditions the competent authority forms an opinion that a co-operative society ought to be wound up and makes an interim order directing it to be wound up which order is subject to be reviewed after giving an opportunity to the society of being heard before making a final order vacating or confirming the interim order ? If the answer be in the affirmative is the law valid having regard to the dynamic concept of the principle of equality enshrined in Article 14 ? If the answer be in the negative what is the form of hearing required to be given before an interim order can be made ? The Factual Matrix :
(2.) The petitioner is a co-operative society registered under Section 9 of the Gujarat Co-operative Societies Act 1961 (hereinafter referred to as `the Act). It was initially registered on 13/11/1973 It functions as a primary co-operative society since 9/09/1947 In course of time its business expanded. At present it claims to have 860 Savings Bank Accounts 450 Current Accounts 200 Fixed Deposit Accounts 400 Recurring Deposit Accounts and 252 Advances Accounts. The number of shareholders is 529 As per the audit report for the period ending 30/06/1978 the petitioner had 125 Savings Bank Accounts 196 Current Accounts 132 Fixed Deposit Accounts 163 Recurring Deposit Accounts including Mini-Bank Accounts and 153 Advances Accounts at the end of the relevant accounting period. The total worth of deposits as aforesaid aggregatas to about Rs. 29 0 0000'/
(3.) As the petitioner is carrying on banking business it is required to obtain a licence in that behalf from the Reserve Bank of India under Section 22 read with Section 56 of the Banking Regulation Act 1949 It appears that the petitioner had made an application to the Reserve Bank for grant of such a licence and that on 23/02/1979 the Reserve Bank made an order refusing licence. The petitioner challenged the said order in Special Civil Application No. 721 of 1979 instituted on its behalf of this Court on 13/03/1979 The preliminary hearing of the writ petition took place for the first time on 30/03/1979 and this Court ordered notice to issue to the Reserve Bank. The petition was heard from time to time thereafter and it was ultimately withdrawn on 1/05/1979 The petition was withdrawn according to the petitioner upon an assurance held out by and on behalf of the Reserve Bank that the matter would be recosidered after taking into account the representation made by the petitioner. We are not concerned in this petition with the question whether or not such assurance was actually held out and since there is a serious dispute on that question between the petitioner and the Reserve Bank in a cognate proceeding we do not deem it fit and proper to make any observation in that behalf in the instant proceedings. Be that as it may it is not in dispute that the petitioner has filed in this Court a fresh petition namely Special Civil Application No. 2259 of 1979 against the Reserve Bank and Union of India on 3/08/1979 seeking an appropriate writ order or direction commanding the respondents to cancel the order dated 23/02/1979 refusing to grant to the petitioner licence to carry on banking business and to reconsider the matter after restoring the petitioners application in that behalf on file and for other appropriate reliefs. Rule nisi has been issued in the said petition on 7/08/1979 and the matter is pending for decision.;

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