IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :17.07.2018 CORAM THE HON'BLE MR.JUSTICE [ENTITY] [CASE NUMBER] and [CASE NUMBER] and [CASE NUMBER] Mohan Breweries and Distilleries Ltd. Represented by its Chief Financial Officer South India Film Chambers of Commerce Building No.605, Sundaram Avenue Thousand Lights Chennai  600 006. Petitioner vs Tamil Nadu Cooperative Sugar Federation Represented by the Managing Director, 5th Floor No.690, EVR Periyar Building, Anna Salai, Nandanam Chennai  600 035. Respondent Prayer: Writ Petition filed under [SECTION] of the [ACT] praying to issue a Writ of Mandamus, directing the Respondent to consider the Petitioner's Representation bearing Reference No.MBDL/CS/2016-17 dated 04.05.2016 in accordance with law and consequently forbear the Respondent, or any entities functioning under it, or any of its employees or subordinates, from forfeiting the Security Deposit and EMD of Rs.81,25,000/- submitted by the Petitioner, or interfering with the Petitioner's right to lift the quantity of Molasses mentioned in the Sale Order bearing No.111 issued by the Respondent dated 11.03.2016. For Petitioner : Mr.[ENTITY] For Respondent : Mr.[ENTITY] O R D E R
The relief sought for in this writ petition is for a direction to direct the respondent to consider the Petitioner's Representation bearing Reference No.MBDL/CS/2016-17 dated 04.05.2016 in accordance with law and consequently forbear the Respondent, or any entities functioning under it, or any of its employees or subordinates, from forfeiting the Security Deposit and EMD of Rs.81,25,000/- submitted by the Petitioner, or interfering with the Petitioner's right to lift the quantity of Molasses mentioned in the Sale Order bearing No.111 issued by the Respondent dated 11.03.2016.
2.The very relief sought for is for an injunction to forbear the respondent from forfeiting the Security Deposit and EMD of Rs.81,25,000/-(Rupees Eighty One Lakh and Twenty Five Thousand only).
3.The learned counsel appearing on behalf of the writ petitioner made a submission that no final order has been passed in respect of the representations submitted by the writ petitioner on 04.05.2016. Without passing any final orders, the respondent's are attempting to forfeit the Security Deposit and EMD of Rs.81,25,000/-(Rupees Eighty One Lakh and Twenty Five Thousand only) already deposited by the writ petitioner with the first respondent / Federation. Under those circumstances, the writ petitioner was constrained to move the present writ petition.
4.The writ petitioner is Mohan Breweries and Distilleries Limited and pursuant to the Tender Notification issued by the first respondent/Federation, the writ petitioner submitted their bid and it is an admitted fact that the writ petitioner was the successful bidder and granted with licence to lift the Molasses from various Sugar Mills as per the terms and conditions stipulated in the Tender Notification.
5.The grievance of the writ petitioner is that they are unable to lift the entire Molasses on account of various reasons. One of the reason for such a delay was that the Government has not passed appropriate orders in time, extending the licence and the writ petitioner was unable to act immediately. Thus, the delay in lifting the Molasses occurred on account of the administrative delay on the part of the respondent. Thus, the petitioner cannot be blamed and accordingly, they are not entitled to forfeit the deposit made by the writ petitioner.
6.The learned counsel appearing on behalf of the respondent's opposed the contention by stating that these all are the disputed facts, which all are to be adjudicated before the competent Forum. This Court cannot entertain such disputed facts by way of a writ petition under [SECTION] of the [ACT]. If at all, the petitioner is aggrieved from and out of the actions of the respondent's, it is left open to the writ petitioner to approach the competent authorities under the Provisions of the [ACT] referred to as the Act). The respondent is a Cooperative Society, registered under the provisions of the Act. The Certificate of Registration was issued by the functional Registrar. The Bye-laws also are approved by the Registrar under the provisions of the Act. The learned counsel for the respondent submitted the copy of the Bye-laws of the Cooperative Societies. The members of the Federation are contributing and raising funds for the functioning of the first respondent society. The resolutions are passed and decisions are taken in the General Body and elected Board is administering the Cooperative Society. Thus, the respondent is a Cooperative Society, registered under the provisions of the Act and elected board of members are administering the Cooperative Society. The Managing Director is appointed under the provisions of the Act and he will be functioning as a Director and in the Board, a Government officer is serving on foreign service terms and conditions. Therefore, the respondent society is not a State within the meaning of [SECTION] of the [ACT] and relying on the judgment of the Larger Bench of this Court in the case of [PRECEDENT] Deputy Registrar of Co-operative Societies, [ENTITY] reported in [PRECEDENT], the learned counsel for the respondent contended that the writ petition is liable to be dismissed as not maintainable.
7.It is further contended that the writ petitioner is not entitled for the relief as the respondents have not taken any final decision in respect of the forfeiture of the deposited amount and even the present writ petition is filed only on apprehension and there is no order to show that the Security Deposit and EMD of Rs.81,25,000/-(Rupees Eighty One Lakh and Twenty Five Thousand only) was already forfeited by the respondent's. No such decision has been taken nor any notice has been issued to the writ petitioner in this regard. Thus, the writ petition is not only premature and not maintainable in view of the fact that it is a Cooperative Society and not a State within a meaning of [SECTION] of the [ACT].
8.The learned counsel for the petitioner in support of the arguments as advanced submitted few judgments to show that the writ petition is maintainable.
(1)In the case of [PRECEDENT], the Hon'ble Supreme Court of India held that when there is a infringement of any statutory provisions of a Cooperative Society, then a writ petition can be maintained.
(2)In the case of [PRECEDENT], the relevant portion in paragraph 2 of the above said judgment which is extracted hereunder:
The picture that ultimately emerges is that the tests formulated in [ENTITY]'s case (supra) are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of [SECTION]. The question in each case would be - whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within [SECTION]. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State.
9.The learned counsel for the petitioner made a submission that it is to be ascertained, whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. Under these circumstances, the nature of control exercised by the Commissioner of Sugars also to be considered, while deciding the maintainability of the writ petition in the case of [PRECEDENT], and the relevant paragraph 60 has been relied upon, which is extracted hereunder:
60.Although we do not intend to express any opinion as to whether the cooperative society is a "State" within the meaning of [SECTION] of the [ACT] but it is beyond any cavil of doubt that the writ petition will be maintainable when the action of the cooperative society is violative of mandatory statutory provisions. In this case except the Nodal Centre functions and supervision of the cooperative society, the State has no administrative control over its day to day affairs. The State has not created any post nor could it do so on its own. The State has not borne any part of the financial burden. It was, therefore, impermissible for the State to direct regularization of the services of the employees of the cooperative societies. Such an order cannot be upheld also on the ground that the employees allegedly served the cooperative societies for a long time.
10.The Apex Court reiterated that when the action of the Cooperative Societies is violative of mandatory statutory provisions, then the writ petition is maintainable.
11.In the case of [PRECEDENT], the relevant paragraphs 30 and 32 are relied and the same is extracted hereunder.
30.In [PRECEDENT], U.P. State Agricultural Produce Market Board has been held to be a `State', holding:
"33. The Board is "State" within the meaning of [SECTION] of the [ACT]. It was constituted in terms of the provisions of the said Act. As the powers and functions of the Board as also the State in terms of the provisions of the statute having been delineated, they must act strictly in terms thereof. It is a statutory authority. Its powers, duties and functions are governed by the statute. It is responsible for constitution of the Market Committees for the purpose of overseeing that agriculturists while selling their agricultural produce receive the just price therefor. It not only regulates sale and purchase of the agricultural produce but also controls the markets where such agricultural produces are bought and sold. The Board is entitled to levy market fee and recover the same from the buyers and sellers through Market Committees. Indisputably, the Market Committees and the Board have power to appoint officers and servants. Although the power of the Board in this respect is not circumscribed, that of the Market Committees is. The Market Committees can appoint only such number of secretaries and other officers as may be necessary for efficient discharge of its functions. Terms and conditions of such services are to be provided by it. [SECTION] of the Act, however, imposes further restriction on the power of the Market Committee by limiting the annual expenditure made in this regard not exceeding 10% of the total annual receipt of the Committee."
32.We have noticed the history of the Federation. It was a part of the Department of the Government. It not only carries on commercial activities, it works for achieving the better economic development of a section of the people. It seeks to achieve the principles laid down in [SECTION] of the [ACT], viz., nutritional value and health. It undertakes a training and research work. Guidelines issued by it are binding on the societies. It monitors the functioning of the societies under it. It is an apex body. We, therefore, are of the opinion that the appellant herein would come within the purview of the definition of Stateas contained in [SECTION] of the [ACT]
12.On a perusal of these judgments cited by the learned counsel for the petitioner, undoubtedly, the Apex Court as well as our High Court in unambiguous terms held that in the event of any violation of the statutory provisions of the [ACT], then a writ would be maintainable.
13.The next point raised is that if the functional control and the administrative control falls on the hands of the Commissioner of Sugars, then also the writ petition can be maintained. Under these circumstances, the learned counsel for the petitioner is of an opinion that the present facts in the case on hand, fits within the ratio laid down by the Apex Court and therefore, the writ petition is to be entertained. The writ petitioner submitted a representation in respect of the grievances. However, no decision has been taken by the respondents and a coercive action has been taken to forfeit the Security Deposit and EMD already paid by the writ petitioner to the tune of Rs.81,25,000/-(Rupees Eighty One Lakh and Twenty Five Thousand only). Under these circumstances, the petitioner had no other option, except to approach this Hon'ble Court under [SECTION] of the [ACT]. Thus, the writ petition is to be entertained in all means.
14.The learned counsel appearing on behalf of the respondent contended that the judgments cited on behalf of the writ petitioner are in-applicable in respect of the facts and circumstances of the present case is concerned. The factual disputes are now raised in this writ petition, which cannot be adjudicated in a writ proceedings. This apart, the writ petitioner has not established any violation of the provisions of the Actand rules. Thus, the judgments referred are not having any direct implications in respect of the facts and circumstances of the present case.
15.This Court would like to cite the judgment of the Larger Bench of our High Court in the case of [PRECEDENT] Deputy Registrar of Co-operative Societies, [ENTITY] reported in [PRECEDENT]. The judgment of the Apex Court were considered by the Larger Bench and the following legal principles are settled in paragraph 21 of the judgment and the same are extracted hereunder:
21. From the above discussion, the following propositions emerge:
(i) If a particular co-operative society can be characterised as a State within the meaning of [SECTION] of the [ACT] (applying the tests evolved by the Supreme Court in that behalf), it would also be an authority within the meaning and for the purpose of [SECTION] of the [ACT]. In such a situation, an order passed by a society in violation of the bye-laws can be corrected by way of Writ Petition;
(ii) Applying the tests in [ENTITY] it is held that a co-operative society carrying on banking business cannot be termed as an instrumentality of the State within the meaning of [SECTION] of the [ACT];
(iii) Even if a society cannot be characterised as a State within the meaning of [SECTION] of the [ACT], a Writ would lie against it to enforce a statutory public duty cast upon the society. In such a case, it is unnecessary to go into the question whether the society is being treated as a person or an authority within the meaning of [SECTION] of the [ACT] and what is material is the nature of the statutory duty placed upon it and the Court will enforce such statutory public duty. Although it is not easy to define what a public function or public duty is, it can reasonably said that such functions are similar to or closely related to those performable by the State in its sovereign capacity.
(iv) A society, which is not a State would not normally be amenable to the writ jurisdiction under [SECTION] of the [ACT], but in certain circumstances, a writ may issue to such private bodies or persons as there may be statutory provisions which need to be complied with by all concerned including societies. If they violate such statutory provisions a writ would be issued for compliance of those provisions.
(v) Where a Special Officer is appointed in respect of a co-operative society which cannot be characterised as a State a writ would lie when the case falls under Clauses (iii) and (iv) above.
(vi) The bye-laws made by a co-operative society registered under the [ACT] do not have the force of law. Hence, where a society cannot be characterised as a State, the service conditions of its employees governed by its bye-laws cannot be enforced through a Writ Petition.
(vii) In the absence of special circumstances, the Court will not ordinarily exercise power under [SECTION] of the [ACT] when the Act provides for an alternative remedy.
(viii) The decision in [PRECEDENT], is no longer good law, in view of the decision of the Seven-Judge Bench of the Supreme Court in [ENTITY] case and the other decisions referred to here before.
16.Even as per the tests laid down in the case of [ENTITY] v. Khalid, reported in 1981 (1) SCC 722, a Cooperative Society cannot be termed as a instrumentality within the meaning of [SECTION] of the [ACT]. The Larger Bench ruled that if there is any statutory violation, then a writ proceedings can be entertained.
17.In the light of the legal principles settled by the Larger Bench of this Court, the present case is to be considered.
18.Admittedly, the writ petitioner was a successful bidder in respect of the Tender Notification issued by the respondent. It is a contractual obligation between the parties to follow the terms and conditions agreed upon by the respective parties. In violation of the terms and conditions of the contract, it is to be construed that it is a disputed facts and the same required submission of documents, adducing of evidences and other factors. The reason for not permitting the writ petitioner from lifting the Molasses from the Sugar Mills are to be adjudicated and the same involves certain question of complex facts and circumstances. Those complex facts and circumstances cannot be decided by this Court in the present writ proceedings.
19.In respect of the maintainability of the present writ petition, this Court is of an opinion that the respondent Society is a Cooperative Society, registered under the provisions of the Act. The Bye-laws formulated by the Society has been approved by the Registrar in accordance with the provisions of the Act. It is stated by the learned counsel for the respondent that there is no Government funding nor any administrative control by the Government authorities directly. The respondent Cooperative Society is functioning and controlled by the elected Board of Directors and members are providing funding support for the functioning of the respondent Society. Thus, the overall control alone has been vested with the Registrar under the provisions of the Act and there is no administrative control or otherwise by the Commissioner of Sugars or by any other competent Government authority under the provisions of the Act. Thus, it is to be construed that the respondent Society is a Cooperative Society registered under the provisions of the Act and there is no administrative control or otherwise by the Commissioner of Sugars or by any other Government authority and contrarily, the administrative control is vested with the elected Board of Directors and the Society is functioning as per the Bye-laws approved by the registrar registered under the provisions of the Act.
20.Considering the nature and character of the Cooperative Society, this Court is of an undoubted opinion that there is no element of any direct administrative control by the Commissioner of Sugars in respect of the respondent Federation. Secondly, the complex disputes of facts and circumstances in respect of the terms and conditions of Tender or contract or agreement can never be adjudicated in a writ petition under [SECTION] of the [ACT]. Thus, the writ petitioner are at liberty to approach the competent Forum or Civil Court for the purpose of redressing their grievances and accordingly, the writ petition is dismissed as not maintainable. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
17.07.2018 kak Internet:Yes/No Internet:Yes/No Speaking/Non-Speaking order To Tamil Nadu Cooperative Sugar Federation Represented by the Managing Director, 5th Floor No.690, EVR Periyar Building, Anna Salai, Nandanam Chennai  600 035.
[ENTITY], J.
kak 17.07.2018