A.P.Dairy Dev.Corp.Federation vs B.Narasimha Reddy & Ors

F. During the years of 1991 and 1995, the benefits of financial assistance rendered to the units by the State and the Central Governments had been very huge i.e. Rs.159.45 lakhs and Rs.729.97 lakhs.

G. On commencement of the Act 1995 into force, the existing co-

J. The Co-operative Tribunal vide its judgment and order dated 9.12.2004 dismissed the original petition against Visakha District Union on the premises that the Act 1995 had not mentioned about returns of assets and the Managing Director had no power to further delegate the power to some one to file the petition.

K. The Legislative Assembly of the Andhra Pradesh vide Resolution dated 8.2.2005 constituted a House Committee consisting of its members belonging to different political parties to investigate into irregularities committed by two of the eight District Unions, namely, Visakha and Ongole (Prakasham) Unions, who also got registered under the Act 1995. The Committee submitted its report pointing out certain irregularities by the said Unions. The Committee also opined that the Act 1995 had adverse consequences on the dairy co-operatives, as it had broken down 3-tier structure, reduced the brand value of Vijaya Brand, created conflict in marketing structures, weakened the financial position of some District Milk Unions etc. and had broken down the common cadre of employees.

It was this Committee which recommended that dairy co-operatives be excluded from the purview of the Act 1995 and so far as the dairy co-

Meanwhile, the order passed by the Co-operative Tribunal was challenged in the Writ Petition No. 1420 of 2006 in pursuance to the 6 policy decision of the Government to exclude the dairy societies from the purview of the Act 1995 and to bring them back under the Act 1964.

M. The State promulgated the Ordinance No.2/2006 excluding the milk dairy co-operative societies from the societies covered by the Act 1995 and imported the fiction that such dairies would be deemed to have been registered under the Act 1964, with effect from the date of registration under the Act 1995.

N. Government Order dated 4.2.2006 was issued to give effect to such amendments and also to take care of transitional position, particularly providing that District Collector would appoint the person in-charge under Section 32(7) of the Act 1964 to manage the affairs of all primary milk producers co-operative societies till further elections or until further orders, so that affairs of those societies would be managed properly.

O. Writ Petitions were filed before the High Court by various District Milk Producers Co-operative Unions challenging Ordinance No.2/2006 and consequential Government Order dated 4.2.2006. The High Court vide interim order dated 8.2.2006 stayed the operation of the Government Order dated 4.2.2006. Meanwhile, the Ordinance was 7 converted into the Act. By the impugned judgment dated 1.5.2007, the High Court allowed the writ petitions.

31. The Government has inherent power to promote the general welfare of the people and in order to achieve the said goal, the State is free to exercise its sovereign powers of legislation to regulate the conduct of its citizens to the extent, that their rights shall not stand abridged.

32. The cases in hand require to be examined in the light of the aforesaid settled legal propositions.

35. It is evident from the record and elaborate discussion by the High Court that Mulkanoor Women Mutually Aided Milk Producers Co-operative Union Limited (W.P. No.3502 of 2006) increased its membership from 72 to 101 village dairy co-operative societies between 2000 and 2006, and increased milk procurement from 6000 litres to 17,849 litres from the value of Rs.24.24 lakhs to Rs.53.00 lakhs. The milk sales went up from Rs.9.30 lakhs to Rs.82.53 lakhs.

viability, conflict of area of jurisdiction or for some class of co-

approval of transfer of assets and liabilities or division or amalgamation or in respect of transfer of all members or disqualification of members etc.

They would be deprived not only of benefits under the said Act, but rights accrued under the Act 1995 would also be taken away with retrospective effect.

41. Cooperative law is based on voluntary action of its members.

& Ors., JT 2010 (11) SC 273)

44. In view of the above, we do not see any cogent reason to interfere with the impugned judgment and order. The appeals lack merit and are accordingly dismissed. No costs.