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3. Both the petitioner Societies are admittedly the members of the Gujarat Cooperative Milk Marketing Federation Limited, which is impleaded as respondent No. 9 in Special Civil Application No. 10206 of 1995. The facts on record disclose that after negotiations, the Government passed Resolutions sanctioning to give a guarantee bond in favour of the Indian Dairy Corporation, the predecessor of NDDB. The initial resolution, was passed by the State Government on 31-3-1982, but all the terms and conditions contained therein came to be substituted by the resolution dated 5-1-1984. These two resolutions disclose that the Government had decided to implement the Operation Flood II Programme in the State under their earlier resolution dated 11-7-1978 and a question regarding giving of Government guarantee to the Indian Dairy Corporation for the repayment of the loan amount that may be received from it by the GCMMFL from time to time for Clusters I and II had arisen and in that context the Government sanctioned the guarantee to be executed in favour of the Indian Dairy Corporation for the repayment of such loans. It was stipulated that the GCMMFL would take necessary steps to enter into tripartite agreements with the recipients of the loans in order to enable them to pay interest on the loan and to repay the principal. The amount of loan was secured by a pari passu charge alongwith the IDC on the unencumbered assets of the GCMMFL and Gujarat Dairy Development Corporation ("GDDC" for short) or their successors and District Unions under Clusters I and II. Under Clause (viii) of the Resolution of 1984, it was provided that in case of default by the GCMMFL and/or GDDC or its successors or recipient Unions in respect of the repayment of the loan, or payment of interest, such amount as may have been paid by the Government to the lending institution under the guarantee will be treated as the sum due from the GCMMFL and/or GDDC or its successors or its recipient Unions to the Government. Under Clause (xi) which came to be amended by the corrigendum issued by the Government on 18-3-1987, the Government had a right to nominate three Government nominees under Section 80(1) of the said Act on the Board of Directors of the GCMMFL as well as on the Board of Directors of the concerned District Co-operative Milk Producers' Union Limited, which were receiving financial assistance through the GCMMFL under Operation Flood II Programme. It appears that by a stroke of pen, under resolution dated 14th April, 1995, the Government had cancelled nominations of persons under Section 80(1) and under Section 80(2) of the Act, as shown in the accompanying statement. Therefore, as per the said Clause (xi) which is based on the provisions of Section 80(1) of the said Act, the Government claims a right to nominate three persons on the petitioners who are member Unions of the GCMMFL and who had received loans under the Operation Flood II Programme. Pursuant to the Government resolutions, a guarantee bond came to be executed by the Government of Gujarat in favour of the IDC on 9th April, 1984 in which there is a reference to the fact that the IDC had agreed to give financial assistance for the implementation of the Operation Flood II Project in the State of Gujarat and that the GCMMFL was to implement directly and through its member Co-operative institutions the Operation Flood II Project in the State of Gujarat. It is also recorded that the State Government had authorised the GCMMFL to receive financial assistance from the Corporation out of which Rs. 29,47,55,300/- were to be treated as loan as per the loan agreement dated August 11, 1982. The GCMMFL was authorised to transfer a part of the loan to its member Co-operative institutions after executing a supplementary loan agreement. The State Government had agreed as a surety to give guarantee of the amount of refund payable by the borrower to the Corporation as per the agreements between them. The surety guaranteed the compliance of the terms and conditions contained in the loan agreement between the Corporation and the borrower and due repayment of the principal of the loan and payment of interest thereon or any instalment or instalments thereof granted by the Corporation, as provided under Clause (3) of the guarantee bond. It was stipulated that the surety consented to the Corporation making any variance that it may think fit in the terms and conditions and agreed that such variance would not affect its liability under the guarantee provided. However, such variance was to be made with the express or implied consent of the borrower. It was also stipulated in Clause (viii) that the guarantee given by the surety was one single and indivisible for the loan that may be disbursed by the Corporation upto a maximum of Rs. 29,47,55,300/-.

(a) That the loan component for the financial assistance both under Operation Flood II and III Programmes is included in the guarantee deed dated 9-4-1984;
(b) The words "Operation Flood II" as appearing in the guarantee deed shall be read as "Operation Flood II and III";
(c) The amount in the guarantee bond is reduced to Rs. 15,79,69,000/- plus charges, interest etc. as per the financial assistance made available to GDDC under Operation Flood II and III;
(d) The GDDC shall be directly responsible for the repayment of the loan component of the financial assistance together with interest and other charges received under Operation Flood II and III Programmes as far as GDDC projects are concerned.