Maranalloor Milk Producers Co-Operative Society Ltd. v. Registrar/Director, Directorate of Dairy Development
2020-08-10
SATHISH NINAN
body2020
DigiLaw.ai
JUDGMENT : The issue involved in these writ petitions relate to the grant of affiliation to Primary Milk Producers Societies with the Central Society. WP(C) No.10590 of 2020 is filed by few primary societies, seeking assignment of membership numbers to them and to permit them to participate in the general body meeting of the Central Society. They also challenge the legality of the general body meeting which was slated to be held on 03.06.2020. Pending the writ petition, the Registrar/Director of Dairy Development passed an order dated 15.06.2020 directing assignment of affiliation number to 33 primary societies, which include the petitioners in WP(C) No.10590 of 2020. WP(C) No.12760 of 2020 is filed by the Central Society challenging the said order of the Registrar/Director of Dairy Development. 2. Heard learned counsel Sri.P.N.Mohanan for the Central Society, the learned Additional Advocate General on behalf of the Director of Dairy Development, Sri.R.T.Pradeep and Sri.M.Sasindran the learned counsel for the primary societies. 3. On the complaint of various primary societies, the Registrar/Director of Dairy Development as per order No.C1/4732/2020 dated 15.06.2020, directed the Central Society to assign affiliation number to 33 primary societies. The direction was issued taking into consideration two aspects; firstly, that on facts there was no ground to refuse membership to the primary societies, and secondly, that they are already deemed members in view of the deeming provision under Section 8A(2) of the Co-operative Societies Act since the Central Society did not pass orders on the applications of the primary societies seeking affiliation, within the stipulated period of sixty days from the date of application. 4. Clause 5 of the bye-laws of the Central Society deals with membership. Clause 5.2.1 of the bye-law reads thus:- “Any registered Primary Milk Producer's Co-operative Societies can be a member. The byelaws of such societies shall be in conformity with the model bye-laws recommended by the Union and accepted by the Registrar of Co-operative Societies.” 5. Clause 13 of the bye-laws deals with the obligations of an ordinary member. Clause 13.1.1. reads thus:- “Supply commodities procured or held by it with the exception of what is retained for local consumption, only to the Union and will not supply or sell directly to any other agency.” 6. The Central Society had attempted to incorporate the said provision in the bye-laws as an eligibility criterion for grant of membership.
Clause 13.1.1. reads thus:- “Supply commodities procured or held by it with the exception of what is retained for local consumption, only to the Union and will not supply or sell directly to any other agency.” 6. The Central Society had attempted to incorporate the said provision in the bye-laws as an eligibility criterion for grant of membership. However, the same was turned down by the statutory authorities. The challenge against the same before this Court, in WP(C) 4959 of 2011, was not successful. 7. On 08.02.2016, the Registrar of Dairy Development issued a circular directing the Central Society to provide membership to all primary societies, if membership is sought for in the prescribed form and on paying the requisite fees. The same was challenged before this Court by the Central Society, in WP(C) No.2974/2017, relying on a resolution of the Board of Directors passed in the year 1997, mandating the requirement under Clause 13.1.1 referred to supra as a condition for grant of membership. The challenge was turned down and the writ petition was dismissed. The Central Society took up the matter in appeal as W.A. 1684/2017. The Division Bench in its judgment dated 18.08.2017 held thus:- “5. We have considered the arguments and in our view, the functional autonomy of the Union is not disturbed. It has a right to refuse. But, that refusal has to be with reference to the provisions of the Act, the Rules and the bye-laws. The direction of the Registrar cannot mean that whoever comes and whatever he may be doing, if he applies, he had to be admitted. The appellant is a Co-operative Milk Producers' Union at the regional level. It can thus, enroll only functional Primary Milk Co-operatives. For the said purpose, to verify the bona fides, it is not just the form that is to be seen. It can look into, whether the Primary Co-operative Milk Society is functional, in the sense, it has a regular elected Managing Committee and it is, in fact, in the business of milk production and collection for sale. But, once that enquiry is over then, the bona fides being established, there is no discretion left. We have to understand the direction of the Registrar in the aforesaid manner and if understood in the said manner then, it is beyond challenge.” 8.
But, once that enquiry is over then, the bona fides being established, there is no discretion left. We have to understand the direction of the Registrar in the aforesaid manner and if understood in the said manner then, it is beyond challenge.” 8. Therefore, when an application for affiliation is submitted by a primary society (as is in the case of the present applicants-primary societies), all that could/need be looked into are, (i) Whether the society has an elected Managing Committee and (ii) Whether it is engaged in the business of milk production and collection for sale. The Division Bench categorically held that once those two factors are ascertained and are answered in the affirmative, there is no discretion left with the Central Society to deny membership. 9. Ext.P6 in WP(C) No.12760 of 2020 filed by the Central Society, is the true copy of the agenda note dated 15.06.2020 of the meeting of the Managing Committee of the Central Society regarding grant of affiliation. A perusal of the same would reveal that, with respect to all the 33 societies in respect of which the Registrar has directed grant of affiliation number, elected Managing Committees are in office and that the societies are engaged in the business. Going by the remarks column therein, recommendation to refuse grant of membership is made solely pointing out violation of clause 13.1.1 of the bye-laws, that is, with regard to supply of milk to the Central Society. As noticed supra, the attempt of the Central Society to amend the bye-laws to include that also as a condition for grant of membership had ended in failure. The further attempt to challenge the directions of the Registrar for grant of membership, relying on the decision of the Managing Committee impliedly incorporating the said obligation of a member as a condition precedent for grant of membership was also not successful. It having already been concluded that, supply of milk to the Central Society which is only the obligation of a member under Clause 13.1.1 of the bye-laws cannot be made as an eligibility condition for grant of affiliation, evidently the reason/remark given in Ext.P6 cannot be sustained. The only reason suggested in Ext.P6 for non-grant of membership being violation of Clause 13.1.1, the Registrar rightly found the 33 primary societies to be entitled for affiliation.
The only reason suggested in Ext.P6 for non-grant of membership being violation of Clause 13.1.1, the Registrar rightly found the 33 primary societies to be entitled for affiliation. The order of the Registrar, finding the entitlement of the 33 primary societies for membership, suffers from no infirmity. 10. The Registrar in his order dated 15.06.2020 has further noticed that, more than sixty days elapsed since the date of submission of the application for affiliation by the 33 primary societies and that, as provided for in Clause 8A(2), deemed affiliation has ensued as a statutory consequence. The Registrar directed grant of affiliation number to the 33 primary societies. 11. According to Sri.Mohanan, the learned counsel for the Central Society, the deeming provision under Section 8A(2) could not come into play in view of the lock down imposed by the Government consequent to the Covid-19 Pandemic since 23rd March 2020. The relevant applications for affiliation were submitted in early March 2020. Relying on the order of the Apex Court in Suo Motu WP(C) 3/2020 dated 23.03.2020 extending the period of limitation under the General or Special laws, it is stated that the period prescribed for application of the deeming provision shall also stand extended/stayed until further orders of the Apex Court. Therefore, the finding of the Registrar that, deemed affiliation has ensued to the applicants/primary societies on the expiry of sixty days from their respective applications is not correct, submits the learned counsel. It is also contended that, the Registrar has usurped the power of the Managing Committee to consider and pass orders on the applications for affiliation; the Registrar has only an appellate power under Section 8A(3) and hence he could not have passed the order in question, submits the learned counsel. 12. The Apex Court ordered extension of limitation/stay of running of time with regard to filing of proceedings before courts and Tribunals. The order does not mention about statutory prescriptions of time for an authority to take decision on an application. Be that as it may, necessarily, a deeming provision has to be understood in the backdrop of the purpose for which the provision was incorporated. In State of Bombay v. Pandurang Vinayak AIR 1953 SC 244 , the Apex Court held that, in interpreting a provision creating a legal fiction, the court is to ascertain, for what purpose the fiction is created.
In State of Bombay v. Pandurang Vinayak AIR 1953 SC 244 , the Apex Court held that, in interpreting a provision creating a legal fiction, the court is to ascertain, for what purpose the fiction is created. In State of Travancore-Cochin v. Shanmugha Vilas Cashewnut Factory, Quilon AIR 1953 SC 333 , S.R.Das, J observed, “When a legal fiction is created, for what purpose, one is led to ask at once, is it so created?”. In Bengal Immunity Co. Ltd. v. State of Bihar [1955] 2 SCR 603 at p. 606, the Apex Court observed that, legal fictions are created only for some definite purpose and these must be limited to that purpose and should not be extended beyond that legitimate field. 13. The purpose behind incorporation of the deeming provision under Section 8A(2) is obviously, to ensure that applications for affiliation are not tied and stacked up, and to have it dealt with immediately. It is for the Managing Committee to decide on the applications for grant of affiliation. If the circumstances prevalent prevented the Committee from taking a decision on the application, then it will be arduous to hold that deemed affiliation has ensued consequent to the efflux of time, since that would be against the spirit, object and purpose behind the incorporation of the deeming provision. Therefore, what needs to be looked into is, whether the committee was totally prevented from passing orders on the application within the prescribed period of sixty days from the date of the respective applications. 14. Exts.P3 and P4 in WP(C) 12760/2020 filed by the Central Society reveals that the Central Society was functional as on 21.04.2020 and 07.05.2020. Ext.P20 in the WP(C) No.10590/2020 which is notice of General Body dated 18.05.2020 also indicates that the Central Society was functioning. So also the communication dated 16.05.2020 from the Managing Director of the Central Society to a primary society(Ext.P16 in W.P(c).10590 of 2020) shows that the managing committee held a meeting on 30.04.2020. All these indicate that the Society was functional during the period in question. That apart, counsel on both sides have placed before me few Government notifications regarding the lockdown, permitted activities, relaxations etc. Those are matters which the Court can take judicial notice of. From the notifications it is evident that, functioning of milk marketing societies were permitted, of course, subject to strict adherence to the protocol.
That apart, counsel on both sides have placed before me few Government notifications regarding the lockdown, permitted activities, relaxations etc. Those are matters which the Court can take judicial notice of. From the notifications it is evident that, functioning of milk marketing societies were permitted, of course, subject to strict adherence to the protocol. These apart, it is very pertinent to note that the Central Society was heard by the Registrar before passing the order in question and the society never had a case before the Registrar that the non-consideration of the applications within the stipulated time was on account of the lockdown imposed by Government. Therefore, it cannot be said that the Central Society was, in the given circumstances, totally prevented from functioning, that they did not function and hence could not consider the applications. On the above, it can only be held that, the deeming provision operated during the period in question and the order of the Registrar cannot be faulted. 15. On the contention that the Registrar who is only an appellate authority under Section 8A(3) of the Co-operative Societies Act has usurped the powers of the managing committee to decide on the applications for affiliation, it is noticed that the direction of the Registrar was on the complaint by the primary societies alleging inaction on their applications by the Central Society and claiming deemed affiliation. The Registrar was only exercising the supervisory powers, be it under Section 66A or Section 66(2) of the Co-operative Societies Act, and not as an appellate authority. It is significant to note that, the report sought for by the managing committee has recommended denial of affiliation solely on a ground which has been found supra to be unsustainable. Even before this Court the Central Society does not express their willigness to grant affiliation discarding the said remarks. This court has on merits and independent of the order of the Registrar, found the entitlement of the 33 primary societies for affiliation. 16. The order of the Registrar is appealable. However, the learned counsel on either side, sought for adjudication by this Court. This court is concious of the fact that, when an efficacious alternate statutory remedy is available the writ jurisdiction need not be exercised.
16. The order of the Registrar is appealable. However, the learned counsel on either side, sought for adjudication by this Court. This court is concious of the fact that, when an efficacious alternate statutory remedy is available the writ jurisdiction need not be exercised. The peculiar facts obtaining in the case, the issue to be decided, the earlier rounds of litigation touching upon the issue at hand and which had reached upto this Court, and the desire of both the contesting parties for an adjudication on the issue by this Court, impelled me to proceed to adjudicate the issue on merits. 17. On merits, the 33 primary societies referred to in the order of the Registrar having been found to be entitled for membership, there is no reason to delve into the technicalities. A central milk marketing society would only be benefited by grant of affiliation to primary societies since it would only aid to procure more milk for its business. Suffice to notice that the finding of the Registrar regarding the entitlement of the 33 primary societies referred to in its order, for affiliation, and the consequential direction for assignment of affiliation number is based on materials, just and warrants no interference. The challenge raised in WP(C) 12760/2020, against the order of the Registrar, fails. 18. In WP(C) 10590 of 2020, there is a further prayer, challenging the convening of general body which was proposed to be held on 03.06.2020. This Court had as per order dated 02.06.2020 granted stay of further proceedings pursuant to the notice proposing holding of such general body. The petitioners having been held to be members of the Central Society and thus entitled to notice and having a right to participate in the general body, the meeting proposed to be held excluding them is bad in law. There is yet another ground of challenge against the convening of the general body that, the general body is proposed to be held without actual holding of meeting but by circulation of notice. I do not think it necessary to go into the said contention in view of the finding that the proposal to convene the general body meeting without notice to the petitioners who are also member of the Societies is bad. The said ground of challenge is left open. Ext.P20 notice is accordingly quashed.
I do not think it necessary to go into the said contention in view of the finding that the proposal to convene the general body meeting without notice to the petitioners who are also member of the Societies is bad. The said ground of challenge is left open. Ext.P20 notice is accordingly quashed. Resultantly, WP(C) No.10590/2020 is allowed as above and WP(C) 12760/2020 is dismissed.