A P DAIRY DEVELOPMENT CORPORATION Vs. B NARASIMHA REDDY

JUDGEMENT

(1.) All these appeals have been preferred against the impugned judgment and order dated 1st May, 2007 of the High Court of Judicature, Andhra Pradesh at Hyderabad in Writ Petition No. 2214 of 2006, by which the High Court has struck down the provisions of Andhra Pradesh Mutually Aided Co-operative Societies (Amendment) Act, 2006 (hereinafter called as Act 2006) as unconstitutional and further declared that even if the Act 2006 is to be considered constitutional, provisions providing that the Boards of Directors appointed under the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 (hereinafter called Act 1995) shall be deemed to have been continued under the provisions of A.P. Co-operative Societies Act, 1964 (hereinafter called Act 1964), and further G.O. Ms. No. 10 Animal Husbandry, Dairy Development & Fisheries (Dairy-II) Department, dated 4.2.2006 and the consequential proceedings/orders of the Milk Commissioner and Registrar of Milk Co-operatives and the District Collectors concerned in these regards, are quashed.

(2.) Facts:

(3.) Shri R. Venkataramani, Shri S.S. Prasad, learned senior counsel appearing for the Appellants have submitted that the impugned judgment and order are untenable as the Legislature is competent to amend the Act and while doing so the Legislature in its wisdom had rightly decided to treat the milk dairy co-operatives distinctly from all other kinds of societies. Thus, no grievance of discrimination could be raised. More so, there is no discrimination among the milk dairies, as all such dairies have been treated as a separate class. The amendment had not taken away any vested or statutory right of the writ Petitioners by the impugned Act. Both the Acts i.e. Act 1964 as well as Act 1995 are based on the same set of the co-operative principles and serve different sectors of the co-operatives in different ways. Both the Acts co-exist and are not mutually conflicting. Therefore, the question of doubting the validity of the Act 2006 merely on the ground of having retrospective application could not arise. The members of the management committee of the District Unions/writ Petitioners could again contest the election for the posts in their respective society under the Act 1964. Appointment of persons in-charge was merely a temporary/transitional phase to facilitate such elections and, therefore, there was no violation of fundamental rights of any of the writ Petitioners. The High Court erred in recording the finding that the Act 2006 stood vitiated on the ground that it had breached promissory estoppel. The Government undoubtedly, had transferred the management of the assets to the District Unions and as the said District Unions would continue with such management of assets, there was no question of breach of any of the promises made by the State. Doctrine of promissory estoppel does not apply to legislature. There was a rational nexus to enact the Act 2006 as a large number of the milk dairy societies did not enter into the MoU as required under Section 4(4) of the Act 1995. Such legislative action could not be termed as arbitrary and warranting attraction of the provisions of Article 14 of the Constitution of India. There were valid reasons for excluding the milk/dairy societies from the provisions of the Act 1995. Dairy industry being peculiar and having distinct characteristics required States moderation and intervention. Having regard to the special and distinctive features of the Dairy industry and the existence of large number of financially weak and dependent primary milk Co-operative Societies, and the necessity of State funding of these societies, it has been found necessary to take dairy industry out of the purview of 1995 Act. The High Court failed to make distinction of dairy milk societies from other co-operative societies as the dairy milk societies are having with them substantial government interest, assets and government investments. All the societies including the primary societies are dependent on the government and its assets. Such a financial assistance has been granted in view of the provisions of Section 43 of the Act 1964 and the government control over such societies under the Act 1964 is minimal. It was not that the Act 2006 had been brought to have government control over milk dairy societies as under the Act 1995 the government control was negligible. The societies under the Act 1995 "have to be self reliant". Thus, the Act assured such societies a complete autonomy. The Act 2006 was enacted on the recommendation of the House Committee which suggested remedial measures for effective functioning of the dairies in the State. It was so necessary to reconfirm the 3-tier structure e.g. apex society, central society and primary society as such a classification was not available under the Act 1995. The Statement of Objects and Reasons of the Act 2006 clearly provided for justification of amendment (impugned). Therefore, appeals deserve to be allowed and the impugned judgment and order of the High Court is liable to be set aside.