Gujarat High Court
Devalki Dudh Utpadak Sahakari Mandali ... vs State Of Gujarat on 27 July, 2018
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/8746/2008 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8746 of 2008
DEVALKI DUDH UTPADAK SAHAKARI MANDALI LTD
Versus
STATE OF GUJARAT
Appearance:
MR BHARAT T RAO(697) for the PETITIONER(s) No.
1,10,11,12,13,2,3,4,5,6,7,8,9
DS AFF.NOT FILED (N)(11) for the RESPONDENT(s) No. 3,4
MS RITU GURU AGP (1) for the RESPONDENT(s) No. 1
MR TUSHAR MEHTA(472) for the RESPONDENT(s) No. 5
NANAVATI ASSOCIATES(1375) for the RESPONDENT(s) No. 6
RULE SERVED(64) for the RESPONDENT(s) No. 1,2,5,6
CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 27/07/2018
ORAL ORDER
1. When the petition is called out and taken up for hearing learned advocate for the respondent is not present.
Mr. Rao, learned advocate for the petitioners pleads no instruction.
2. In present petition the petitioners hasve prayed, inter alia, that:-
"23(A) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction quashing and setting aside the orders dated 13.6.2008 and 24.6.2008 passed by the respondent No. 3 and permit the petitioners to sell the milk of their members to respondent No. 4 and the respondent No. 3 may not restrain the petitioners from selling milk to respondent no. 4 and may not restrain the respondent no. 4 from accepting the milk from the petitioners societies. (B) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction directing the respondent no. 2 State Registrar, Cooperative Societies to initiate proceedings to take necessary steps to see that only President of milk producers primary cooperative societies can become Board of Directors of respondent no. 5 as the present Board of Directors are not as per the Act and as per the bylaws for which the respondent no. 5 has been formed for the reasons stated in the Memo of petition and in the interest of justice and fairness of things."
3. So as to support and justify the relief prayed for in the petition, the petitioners have narrated below mentioned Page 1 C/SCA/8746/2008 ORDER facts:-
"7. The petitioner no.1 society is registered under the provisions of The Gujarat Cooperative Societies Act,1961 (hereinafter referred to as "the Act" for the sake of brevity) in the year 1984 when there was no District Milk Producers' Union in Amreli District and since then the petitioner no.1 is selling the milk of its members to respondent no.4 for which the respondent no.4 has made arrangements for collecting the milk by respondent no.4's vehicles. Petitioner no.1 society is making substantial profits by making payments to its members the market price which is passed over by the respondent no.4. The petitioner no.1 has 344 members and it is supplying daily 360 litres of Milk to respondent no.4. The petitioner no.2 society was also registered in the year 1984 and since then it is selling its milk to respondent no.4. The petitioner no.2 is having 262 members. The petitioner no.2 is profit making society. The petitioner no.3 society is registered in 1987 it is selling milk since its establishment to respondent no.4. It is profit making society. The petitioner no.4 society is also profit making society and since then its inception it its selling milk of its producer members to respondent no.4. The petitioner no.5 society is registered in 1989 and since then it is selling milk to respondent no.4. It has membership strength of 110. It is profit making society. The petitioner no.5 is proposed society having membership of 50. It is profit making society and since inception it is selling milk to respondent no.4. The petitioner no.7 society is registered in 1985 with a membership strength of 175. It is profit making society. Since inception it is selling milk to respondent no.4. The petitioner no.8 society is registered in the year 1983. Since inception it is selling milk to respondent no.4. It is profit making society. The petitioner no.9 society is registered in l997 with membership strength of 164. Since inception it is selling milk to respondent no.4. It is profit making society. It is supplying 950 litres of milk daily to respondent no.4. Petitioner no.10 society is registered in 1985 and since then it is selling milk to respondent no.4. It is profit making society. Its membership strength is 80 and it is supplying daily 280 litres of milk. Petitioner no.11 society is established in 1984 and since then it is selling milk to respondent no.4. It is profit making society. It has membership strength of 174 and it is supplying daily 756 litres of milk. Petitioner no.12 society is registered in 1984. It is profit making society. It has membership strength of 100. It is supplying daily 450 litres of milk. Since inception it is selling milk to respondent no.4. Petitioner no.13 is proposed society with membership strength of 121 and daily supply of milk is 500 litres. Since inception it is selling milk to respondent no.4. It is profit making society. It is submitted that all the petitioner societies have resolved in their special general meeting to challenge the orders of the respondent no.3 and authorized their President/Secretary in this respect by passing necessary resolutions.
It is submitted that petitioner nos.1 to 7 are from Kunkavav Taluka whereas petitioner nos.8 to 13 are from Babara Taluka from District Amreli. Petitioners crave leave to refer to and rely upon the annual reports of 2007-08 of the petitioners societies showing that all the petitioners societies are making profits by collecting milk of their producers and supplying it to respondent no.4.
8. It is submitted that earlier Chalala Dudh Utpadark Sahakari Sangh at Chalala in Amreli Taluka was set up but on account of mismanagement, the said Chalala Milk Producers' Cooperative Union was ordered to be wound up and so many milk producers of primary level were not able to recover price of the milk deposited by them and they were getting much lesser price than the other District Level milk Producers' Unions. Thereafter the milk producers of Amreli District are supplying milk to private vendors of Kunkavav and Babara Taluka Primary Milk Producers' Societies and they have continued with respondent no.4 since years together.
9. It is submitted that the respondent no.4 is providing various facilities to Dudh Utpadak Sahakari Mandalis and its members. The respondent no.4 gives Rs.2.70 per fat to the milk producers and from 1.7.2008 the prices have been revised by respondent no.4 at Rs.3.00 per fat. The respondent no.4 union purchases the milk of the Buffaloes and Cows on the same price. The respondent no.4 provides emergency veterinary services in case of producers' cattle all of a sudden getting sick. The respondent no.4 provides PHC services free of cost. The respondent no.4 also holds camps for Artificial Insemination for the cattles of the petitioners' producers members. It provides seeds of the cattle feed and cattle feed are subsidized rates. It is collecting milk free of cost, it is holding came in each village twice and thrice in a Page 2 C/SCA/8746/2008 ORDER year. The respondent no.4 gives facility of insurance to each of the milk producers whereunder out of premium of Rs.200/- producers pay Rs.40/-, petitioner societies pay Rs.40/-, respondent no.4 pays Rs.20/- and Rs.100/- is being paid by the Central Government. As against this the producers get the insurance cover of Rs. 1 .00 lakh in case of accidental death and Rs.50,000/- in case of permanent disablement. Respondent no.4 gives scholarship of Rs.1200/- to each student of members of petitioner societies producers members towards education if the child is studying in Standards 8, 9, 10, ll & 12. This benefit is being given for two children of each producer members of the petitioner societies. Over and above the respondent no.4 pays the price of the milk and does not reduce the fact whatever milk is collect at the fat shown by the petitioners societies from the collection centre, on the same fat the respondent no.4 is paying to the producers. The respondent no.4 makes payment to the producers every 10 days and pays the price difference distribution ever year. Over and above the respondent no.4 also extends cooperation for purchasing cattles by requesting the District Cooperative Bank for extending financial assistance.
10. It is submitted that Shri Dilip Sanghani, Hon'ble Minister and Shri Purshottam Rupala, Hon'ble M.P. got registered Amreli District Dudh Utpadak Sahakari Sangh Ltd. but they could not start operations because the milk porducers of Amreli District did not have faith in them because of their past experience.
11. It is submitted that the respondent no.5 is only collecting 8000 litres of Milk every day and sending it for process at Anand. The respondent no.5 does not have any facility for processing the milk and manufacturing milk products. It is submitted that the respondent no.4 is not regularly making payments to producers. The price difference is very high as compared to respondent no.4. The respondent no.5 makes payment of Rs.2.70 per fat for Buffalo milk and Rs.l.33 for cow Milk whereas respondent no.4 makes payment of Rs.2.70 per fat for both Cow and Buffalo milk and it is revised at Rs.3.00 per fat from 1.7.2008. The respondent no.5 does not have any veterinary facility. It is not providing any financial assistance to the milk producers, no veterinary treatment facility is there with respondent no.5. The most shocking thing that the petitioners society have come to know that milk which is sent by the milk producers to the respondent no.5, they are reducing the fat while making payment and causing financial loss to the milk producers. Not only that they are not paying to the milk producers at interval of every 10 days but payments are made at interval of 30 days or 45 days. it is submitted that the administration of the respondent no.5 has serious disputes as the management of the respondent no.5 was not able to pay salary to the employees regularly. It is submitted that respondent no.5 is incurring heavy losses. For the year 2007-08 it had incurred loss of Rs.21,890,976.20ps.
12. I. It Is submitted that the management of the respondent no.5 is not in the hands of the milk producers but it is in the hands of the primary cooperative societies. There are political disputes among them and therefore also the milk producers are always at loss because of the internal political rivalry.
13. It is submitted that over and above the facilities which are provided by the respondent no.4 which are not there with the respondent no.5 and as per the information collected by the petitioners societies from the existing milk producers who are also not happy with the respondent no.5 and the respondent no.5 has started using political pressure because of one of the Directors of the respondent no.5 is Hon'ble Minister of Cooperative and one of the Director is State B.J.P. President and Member of Parliament as the milk of the present petitioners societies are having every day of collection of milk of 11,000 litres which is sold to respondent no.4 while in entire respondent no.5 the total collection of milk every day is hardly 8000 litres. Therefore the respondent no.5 has pressurised the respondent no.3 District Registrar, Cooperative Societies, Rajkot and indirectly pressurized the respondent no.3 for passing orders against the respondent no.4 not to accept milk of the petitioners societies.
14. It is submitted that on 11.6.2008 the respondent no.5 wrote letter to respondent no.3 that respondent no.4 may be restrained from accepting milk of petitioners societies. It is submitted that by the said letter the respondent no.5 requested the respondent no.4 that the respondent no.4 should not accept the milk of the petitioners societies. ..........It is submitted that pursuant thereto, on 13.6.2008 the respondent no.3 passed an order directing the respondent no.4 not to accept the milk of the present petitioners societies. .........It is submitted that by the said letter the respondent no.3 requested the respondent no.4 not to accept the milk of the present Page 3 C/SCA/8746/2008 ORDER petitioner societies of Kunkavav and Babara Taluka. It is submitted that pursuant to the said order of the respondent no.3, the respondent no.4 passed a resolution that the respondent no.4 will not accept the milk ii-om the petitioners from 1.7.2008....
15. It is submitted that thereafter petitioner societies approached the respondent no.3 the District Registrar and also respondent no.4 and made representation and objection in the general Board meeting of the respondent no.4 and requested that we are not ready to supply the milk to respondent no.5 as there is price difference and we are sufferers for various reasons and we cannot be compelled to supply milk to respondent no.5 against our wish. Thereafter the respondent no.3 on 24.6.2008 granted extension of one month. .....
16. It is submitted that thereafter, on the same day, on coming to know these facts, the respondent no.5 approached the Hon'ble Minister Shri Dilip Sanghani who is Director of the respondent no.5 and got the order dated 24.6.2008 of the respondent reversed on 24.6.2008 itself. .......
17. It is submitted that thereafter the respondent no.4 issued circular instructing the petitioners societies that it will not collect the milk pursuant to the directions given by the respondent no.3 on 24.6.2008.........."
4. Initially the respondent No.6 opposed the petition. In the reply affidavit filed by the respondent No. 6 it is averred and stated that:-
"2. I state and submit that the white revolution in India began from the Gujarat State due to growth of cooperative movement on "Anand Pattern" cooperative structure. The cooperative model that Amul pioneered --a three -tier structure that comprised Village dairy cooperative Socities, district-level milk unions and state level federations. came to be known as the "Anand Pattern" cooperative structure. The basic detail of "Anand Pattern" is as follows:
A village dairy cooperative society (VDCS) is composed a primary milk producers, typically residents of the same village, who commit to sell their surplus milk to cooperatives. VDCS sale this collected milk to District cooperative milk union.
The district cooperative milk union, the next level of organization in the Anand pattern structure, is formed by union of VDCS of the same district. Its main activity is to process and produce various products from milk collected from VDCSS. The state level cooperative federation, the apex level of organization in Anand pattern structure, is formed by union of district level cooperative milk unions of the same state. The State Federation markets the milk products produced by district milk unions.
I state and submit that these Anand Pattern structure was considered as basis for dairy development in India and it was replicated all over India through Operation Flood Programme, which started in 1970 by NDDB. The Government of Gujarat also accepted this structure for growth and development dairying in Gujarat state and replicated it through Gujarat Dairy Development Corporation.
3. I state that the Government of Gujarat has formed Gujarat State Cooperative Council as per provisions of Section 156(1) of Gujarat Cooperative Societies Act, 1961 vide resolution no. rsp-1085-1430 G dated 15-7-87. The membership of Gujarat State Cooperative council is comprised of all apex state level cooperatives. The Hon'ble Minister of Cooperation, Govt. of Gujarat is the Chairman of the council and Registrar, Cooperative Societies, Govt. of Gujarat is member secretary of the council.
One of the objectives of the council is to review the cooperative movement and suggest ways of coordinating the activities of cooperative societies in the state. The council is conducting meeting of its members from time to time.
Page 4 C/SCA/8746/2008 ORDER
4. I further state and submit that the council has also recognized the importance of the "Anand Pattern" structure in the state and decided to follow the same for development of the dairying in the Gujarat State. In the meeting of the council held on 15th July 2004, members have discussed on the issue of implication of division and restructuring of Talukas and Districts on the cooperative dairy industry in the State. After detailed discussion it was decided that for viability of the dairy cooperatives and for optimum utilization of huge milk processing infrastructure established by dairy cooperatives, they should continue to function as per principles of Anand pattern. Accordingly, their area of operation was also kept same as specified in their byelaws (Which is erstwhile district areas prior to district bifurcation in 1997)
5. I state and submit that Anand pattern structure is prevalent in the Gujarat State. As on 31¢! March 2003, more than 27.16 lakh milk producers of Gujarat are united in 13,141 village dairy cooperative societies. These VDCS are united in 13 district cooperative milk producers unions, which in turn are united in state level federation called Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), the replying respondent no. 6. In this structure, each VDCS, district milk union and state federation has their own statutory registered bye-laws, which they are bound to follow, respect and adhere to as per the Gujarat Co~operative Societies Act, 1961. These bye-laws has provision, which specifies their area of operations: As per this provision of bye-laws, at village level VDCS, geographical area of operation is limited to revenue village boundaries. For district level milk unions, area of operation is limited to erstwhile district areas prior to district bifurcation in 1997 (as decided by Gujarat State Cooperative Council). Annexed hereto as AnneXure-I (Colly.) are copies of the statutory registered bye-laws of respondent no.4 and respondent no.5, both showing the respective areas of operation of each as being limited to their district.
6. I state and submit that during the course of evolution of the said "Anand pattern"
co-operative federal structure at the State level, various district level milk unions came into existence at different point of time depending upon their local, geographical and other situations and factors. During the transition period, in absence of District Level Milk Producers Union in a particular district, for the development of milk producers and to facilitate formation of village level milk producers co-operative societies, neighbouring district milk union has helped them by organizing farmers, formation of VDCS and also by providing logistics support for milk procurement. This helps the VDCS of neighbouring district to establish and grow. Once sufficient numbers of VDCS are organized and registered in the neighbouring district, leadership of the neighbouring district form their own district cooperative milk producers union so as to help them in achieving profitability of the VDCS as well as the union in increase overall milk procurement.
7. These VDCSs of Amreli District, to avail the benefits of the cooperative movement and in absence of district cooperative milk producers union in their own district, they requested Rajkot district cooperative milk producers union to procure milk from them and arrange logistics. Accordingly, Rajkot district cooperative milk producers union, as per Cooperative Principle 'Cooperation among Cooperatives" helped these VDCSs and allowed them to supply milk to Rajkot district cooperative milk producers union. However as per normal practice of "Anand Pattern" they have not enrolled these VDCSs as their members.
8. I state that now as respondent no, 5 Amreli District Cooperative Milk Producers' Union has become functional since 2007, as per the accepted "Anand pattern"
procedure, the petitioners village dairy cooperative societies, in the area of operation of respondent no. 5 Amreli District Cooperative Milk Producers' Union, should start supplying milk to respondent no. 5
9. I state and submit that Borad of GCMMF has enrolled respondent no. 5 Amreli District Cooperative Milk Producers' Union limited as nominal member vide GCMMF' Board resolution no. 8.2 dated 5" February 2008 and therefore it is our interest to look after the union's development. GCMMF has also nominated its representative on Board of respondent no. 5 Amreli District Cooperative Milk Producers' Union limited and on request of respondent No.5, GCMMF has also deputed one officer to assist respondent no. 5 in their operational and managerial activities."
5. At initial stage the respondent No. 5 also filed affidavit Page 5 C/SCA/8746/2008 ORDER wherein it is averred and stated that:-
(3) I state and submit that in almost every district in the State of Gujarat, there exists a district level union like the respondent no. 4 and respondent no. 5 herein who also function on co-operative principles and are registered co-operative societies which themselves are also federal societies. Each district level unions like the respondent no. 4 and respondent no.-5 have their definite area of operation and can function only within the definite area of operation which is defined in their respective Bye-laws. So far as respondent no. 5 is concerned, it is a district level union as contemplated in Bye-laws of the GCM Federation and its area of operation covers the entire revenue District of Amreli.....Similarly, the area of operation of respondent No, 4 which is a District level union for Rajkot District is revenue District of Rajkot. The territorial limits of the respondent No.4 Union is specifically defined in its statutorily registered Bye-law No. 1.3 which stipulates the area of operation of respondent no. 4 Union......
(4) I state and submit that during the course of evolution of the said co-operative federal structure at the State level, various district level unions came into existence at different point of time depending upon their local, geographical and other situations and factors. During the transitional period, with a view to ensure that primary level village co-operative societies of milk producers also from part of the said federal structure even in absence of a district level union in the district which was permissible to permit such co-operative societies to deposit their milk with the district unions in existence in the neighbouring districts. So far as the present case is concerned, the petitioner-societies are situated outside the area of operation of the respondent 4 society and therefore could not have been and were not enrolled as members of the respondent no. 4 society, but by an interim arrangement, were permitted to be enrolled as nominal members and were supplying milk to the respondent no. 4 society. Once the respondent no. 5 society came into existence in the year 2002, even such nominal affiliation was contrary to the Bye-laws of both respondent No. 4 society and the respondent no. 5 society and therefore such an arrangement, during the transitory period by which the respondent no. 5 became functional, was permitted with "No Objection" granted by the respondent no. 5. (5) I state and submit that the respondent no. 5 society has now become fully functional and is already enrolled as a member of the GCM Federation and is in the process of acquiring its ordinary membership if it can supply the requisite quantity of milk to the said State level Federation as per the Bye-laws of the said Federation. The respondent no. 5 has also accepted the supervision and control Of the GCM Federation and the said Federation has a representative in the managing committee of the respondent no. 5 society. The said GCM Federation has also sent one Shri Mahul. M. Joshi who is a representative of the said GCM Federation to function as Chief Officer of the respondent no. 5 dairy to ensure compliance of all Bye-laws of the Federation.
(6) I state and submit that in light of the aforesaid State level federal structure contemplated, there may be a phase in terms of time where a district union passes through a phase of transition and some minor difficulties may be faced within the district. However, keeping the State level distribution of milk in mind, it becomes incumbent that each district level union operates within the sphere of its operation as contemplated in their respective Bye-laws. Once the respondent no. 5 district union comes into existence as a District Union for Amreli District, it would be impermissible for the respondent no. 4 to accept milk on cooperative principles or otherwise from the village level co-operative producers cooperative societies falling within Amreli District which is the area of operation of the respondent no. 5 society. The respondent no. 5 which is also a similarly situated affiliated district union to the GCM Federation, has also accepted the said co-operative federal structure at the State level and has accepted the milk only with "No Objection" given by the respondent no. 5 district union till the respondent no . 5 union becomes fully functional. Once the respondent no. 5 became functional, it intimated the statutory authorities and withdrew the "No Objection" and thérefore it became necessary for the petitioners to deposit their milk with the respondent no. 5 district union in the larger interest of the co-operative federal structure envisaged in the State of Gujarat. It is submitted that since the Registrar has statutory powers under section 160 of the Act to issue direction either in public interest or for the purpose of securing the proper implementation of co-operative protection or for linking and co-ordinating of co-operative activity, the said authority was approached to issue direction to the petitioner-societies to deposit their milk with the respondent no. 5 union. The said decision is in the larger interest and in the ultimate interest of all milk producers in the District of Amreli.
Page 6 C/SCA/8746/2008 ORDER (7) I state and submit that in light of the aforesaid federal structure envisaged through out the State, it would become clear that if the said discipline and statutory predefinite area of operation is decided by any District Union, the entire co-operative movement at the State level which is claimed and recognized internationally, would be non functional and impossible to operate.
(8) I state and submit that the main grievance voiced by the petitioners appears to be price difference between the respondent no. 4 Dairy and the respondent no. 5 Dairy. I respectfully submit that it is a misconception on part of the petitioners that there is any Price difference between the buffalo milk and the cow milk. I respectfully state and submit that as a matter of fact, the respondent no 5 Dairy adopts the method of calculation which is approved by the GCM Federation is different which has created this misapprehension on part of the petitioners. Even adopting the system of calculating the price of buffalo milk and the cow milk which is followed by the respondent no. 5 Dairy, the price of buffalo milk and the cow milk comes almost equivalent and there is no remarkable difference which is sought to be Projected by the petitioners in paragraph-11 of the petition, wherein the petitioners contend that the respondent no. 5 makes payment of Rs. 2.70 per Fat for buffalo milk and Rs. 1.33 per Fat for cow milk. So far as other facilities like veterinary facilities etc. are concerned, the respondent no. 5 society has already Commenced the said procedure as per the requirements of the GCM Federation and such facilities including Insurance etc would be functional within no time. The petitioners a re also made fully aware about the said position. (9) I further state and submit that it is absolutely a false statement made in the petition that the respondent no. 5 society does not have any facility of processing the milk and manufacturing milk products. The respondent no. 5 has the facilities for processing the milk and manufacturing milk products and in fact manufactures milk products like Ghee, Butter etc. and enhancement of the capacity and other facilities for processing are in the process. It is also absolutely incorrect to state that the respondent no. 5 does not make payment at the interval of every 10 days, but makes payment at the interval of 30 to 40 days. I respectfully state and submit that the payments are made by the respondent no. 5 society only through the bank transactions and amounts of each village level primary cooperative society is deposited in their respective accounts. Such payments are deposited within 10 days only."
6. From above mentioned facts and submissions by the petitioners and respondents it appears that the cause for prosecuting the petition does not survive on account of passage of time since the petition came to be filed.
7. At this stage learned advocate for the respondent no. 6 has appeared. He submitted that the dispute is rendered infructuous with passage of time.
8. The learned advocates for the petitioner and respondent No.6 would submit that during interregnum several changes have taken place and the petitioners appear Page 7 C/SCA/8746/2008 ORDER to have changed their association from one apex body to another or vice versa.
9. Under the circumstances, the reasons on account of which the petitioners raised dispute and the factual background and contention in light of which the impugned order came to be passed and the reasons and ground on which the petition came to be filed and the order came to be challenged are now lost with passage of time.
10. Any submission on merits are not put forward by petitioner or respondents. Any grievance about refusal to accept milk or imposition of any restriction to sell milk or any other ground or grievance is not made out. It is also submitted that the cause to prosecute the petition on merits does not survive and the petition is rendered infructuous.
11. Under the circumstances, following order is passed:-
For reasons mentioned above the petition is disposed of as infructuous. Rule is discharged. Ad-interim / interim relief if any, stands vacated forthwith.
(K.M.THAKER, J) SURESH SOLANKI Page 8