The State of Assam v. Advocates

Order

20.04.2022 BEFORE HON’BLE MR. JUSTICE MANISH CHOUDHURY JUDGMENT & ORDER [ORAL] Page No. 2/10 Heard Mr. D. Baruah, learned counsel for the petitioner; Mr. S.K. Talukdar, learned Standing Counsel, Co-operation Department for the respondent nos. 1, 2, 3 & 4; and Mr. S.N. Sarma, learned Senior Counsel assisted by Mr. K. Kalita, learned counsel for the respondent no. 5.

#2. The petitioner herein viz. Padumoni Majgaon Surabhi Prathomik Dugdha Utpadak Samabai Samity Limited [‘the petitioner Society’] is a co-operative society registered under the provisions of the Assam Co-operative Societies Act, 1949/2007 [‘the Act’, for short]. In

this writ petition, the petitioner Society is represented by one Sri Ananda Chandra Dutta, who is the President of the petitioner Society.

#3. The East Assam Milk Co-operative Producers’ Union Limited [‘the EAMUL’, for short] is a State level co-operative society, as defined under Section 2[hhh] of the Act. The petitioner Society is a primary co-operative society within the definition of 2[y] of the Act. According to the petitioner Society, the EAMUL, at the time of institution of the writ petition, was having 87 nos. of primary co-operative societies as its affiliated members.

#4. It is stated at the bar that the Directors in the Board of Directors of the EAMUL are chosen from the members of the member primary co-operative societies. The EAMUL is an affiliating society whereas the petitioner Society is an affiliated society.

#5. It is also not in dispute that the total paid up share capital of the EAMUL, the State level co-operative society, is ₹ 9.9 lakhs and the State Government’s share in total paid-up share capital of the EAMUL, State level co-operative society is 99.45%. There was a working capital loan from the State Government to the EAMUL, the State level co-operative society to the extent of ₹ 0.35 lakhs. There were other receipts from the State Government to the extent of ₹ 286.65 lakhs. Page No. 3/10

#6. The EAMUL, the State level co-operative society was organized and registered with the objects to carry out activities conducive to the socio-economic development of the milk producers of East Assam centering Jorhat for producing, processing and marketing of commodities related to milk. The area of operation of the EAMUL covers 10 [ten] nos. of districts of Assam.

#7. As per the Statements made by the respondent no. 2 in the affidavit-in-opposition filed in a connected writ petition, W.P.[C] no. 3551/2016 brought on record by the petitioner society, the accumulated loss of the EAMUL during the year : 2015-2016 was ₹ 45,20,282/-. It was further stated therein that the EAMUL received ₹ 2.10 crore as grant from the State Government. As the EAMUL, the State level co-operative society, had sustained losses for a number of years despite extending of substantial amounts as loan from the State Government, a decision was taken by the State Government to hand over the management of the EAMUL to the respondent no. 5 i.e. the National Diary Development Board [NDDB] to revive the conditions of the EAMUL.

#8. The respondent no. 5 is a body corporate constituted under an Act of the Parliament viz. the National Diary Development Board Act, 1987 [‘the NDDB Act’, for short] and the respondent no. 5 has its head office at Anand, Gujrat. The respondent no. 5 i.e. the NDDB is declared as an Institution of National Importance under Section 2 of the NDDB Act.

#9. Pursuant to such decision of the State Government, a Tripartite Agreement was entered into amongst the Governor of Assam, represented by the Principal-Secretary to the Government of Assam, Department of Cooperation; the NDDB [the respondent no. 5]; and the EAMUL on 29.12.2015. The tenure of the Tripartite Agreement was for a period of 5 [five] years with effect from the date on which the management of EAMUL is handed over to the NDDB by the EAMUL and is taken over by the NDDB. After completion of 5 [five] years, the Government of Assam, the NDDB and the EAMUL would have to review regarding further extension of the term of the Tripartite Agreement beyond 5 [five] years.

#10. Clause 1.1., Clause 2.1., Clause 2.2., Clause 2.3, Clause 4.1., Clause 4.2. and Clause

5.1., which bear relevance are extracted hereinbelow :- Page No. 4/10 “1.1. The tenure of the Agreement shall be for a period of five years effective from the date on which the management of EAMUL is handed over to the NDDB by EAMUL and taken over by the NDDB. After completion of five years, the Government of Assam, NDDB and EAMUL shall review regarding further extension of the term of this Tripartite Agreement beyond five years. It can be extended or terminated by mutual consent of all the parties and three months notice on either side shall be required for this purpose.

2.1. NDDB shall take over the management of EAMUL and manage it as Administrator, [through its authorized Management Committee], consistent with the relevant provisions of the Assam Cooperative Societies Act, 2007 and bye-laws of EAMUL as amended from time to time.

2.2. NDDB shall work to improve the status of milk procurement, processing, manufacturing and marketing of Milk products for better capacity utilization of the infrastructure created as envisaged in Assam Dairy Development [ADD] Plan already prepared and submitted to Government of Assam and as revised from time to time.

2.3. The Government of Assam shall ensure independence and autonomy of NDDB in all managerial and operational decisions with regard to EAMUL.

4.1. EAMUL shall render full support to NDDB, its Officers and the Management Committee in managing and running the operations of EAMUL under the provision of this Agreement.

4.2. EAMUL shall have the right to market milk, milk products, by products or any other products of EAMUL anywhere in the State of Assam or outside the State in the interest of EAMUL. However, EAMUL should, give adequate priority to meet the requirement of the State of Assam.

5.1. NDDB shall manage EAMUL for the period of Agreement through a Management Committee formed by NDDB.”

#11. As per the terms and conditions of the said Tripartite Agreement, it is clear that the Page No. 5/10 respondent no. 5 shall take over the management of EAMUL and manage it as its administrator consistent with the provisions of the Assam Co-operative Societies Act, 2007 and the bye-laws of EAMUL, as amended from time to time. It is also clear that the respondent no. 5 shall manage the EAMUL for the period of the agreement through a management committee formed by the respondent no. 5.

#12. The order dated 02.05.2016 passed by the respondent no. 2, impugned in this writ petition, is reproduced hereinunder in its entirety :- “ GOVERNMENT OF ASSAM OFFICE OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES : ASSAM KHANAPARA:::GUWAHATI No. CMP 53/2 Dated Guwahati, the 2nd May, 2016. O R D E R Whereas the Govt. of Assam in Cooperation Department owns more than

99.4% of the total paid up share capital of East Assam Milk Producers’ Coop: Union Ltd. [EAMUL], Jorhat registered under the Assam Coop: Societies Act, 1949 vide Registration No. G1 1982-83, dated 23.08.1982. AND Whereas the Govt. of Assam has also advanced substantial amount as loan to the aforesaid Milk Union for running its operations. AND Whereas in-spite of huge financial assistance/investment from the Govt. of Assam the Board of Directors of East Assam Milk Producers’ Coop: Union Ltd. [EAMUL], Jorhat could not run the affairs of the society properly since a long time, resultantly the society is now non functional. AND Whereas the Board of Directors of East Assam Milk Producers’ Coop: Union Ltd. [EAMUL], Jorhat could not pay the salaries to the staff and other employees and dues to other creditors fully. AND Page No. 6/10 Whereas the Board of Directors of East Assam Milk Producers’ Coop: Union Ltd. [EAMUL], Jorhat by its unanimous Resolution adopted in the meeting of the Board of Directors held on 26.09.2015 decided to hand over the management of EAMUL to National Dairy Development Board [NDDB]. AND Whereas the Govt. of Assam after careful consideration of all the above facts had decided to hand over the Management of East Assam Milk Producers’ Coop: Union Ltd. [EAMUL], Jorhat to National Dairy Development Board [NDDB] and entered into a Tripartite Agreement signed by the Govt. of Assam, National Dairy Development Board [NDDB] and East Assam Milk Producers Coop: Union Ltd. [EAMUL], Jorhat on 29.12.2015 inter-alia appointment of Administrator. And whereas to facilitate appointment of NDDB as “Administrator” under Clause 1.1, 2.1 and 2.3 of the Tripartite Agreement, the Govt. of Assam and Management of East Assam Milk Producers Coop: Union Ltd. [EAMUL], Jorhat have agreed to appoint NDDB as Administrator for a period of 5 years in place of the present Board of Directors of East Assam Milk Producers Coop: Union Ltd. [EAMUL], Jorhat. In view of the above facts and circumstances, I am of the opinion that it has become necessary and expedient in the interest of the Milk Union in particular and the Co-operative Movement in general, to take immediate and urgent steps to dissolve the Board of Directors of East Milk Producers Coop: Union Ltd. [EAMUL], Jorhat in order to facilitate smooth running of the Milk Union by the National Dairy Development Board [NDDB]. Therefore, I, Shri S.K. Gogoi, IAS, Registrar of Coop: Societies, Assam in exercise of powers of the Supreme Authority as conferred under Section 29[4] of the Assam Coop: Societies Act, 2007 do hereby dissolve the present Board of Directors of East Assam Milk Producers Coop: Union Ltd. [EAMUL], Jorhat and appoint the National Dairy Development Board [NDDB] as the ‘Administrator’ to run the affairs of East Assam Mild Producers Coop: Union Ltd. [EAMUL], Jorhat as per the Clause

1.1, 2.1 and 2.3 of the Tripartite Agreement signed by the Govt. of Assam, NDDB and EAMUL on 29.12.2015 for a period of five [5] years from the date of taking over charge as “Administrator” under the terms and conditions as set forth in the Tripartite Agreement with immediate effect. Page No. 7/10 Sd/- S.K. Gogoi Registrar of Coop: Societies, Assam Khanapara, Guwahati”

#13. The assailment made by the petitioner Society is on the ground that the respondent no. 2 i.e. the Registrar of Co-operative Society, Assam is not empowered to dissolve the Board of Directors of EAMUL and to appoint the respondent no. 5 as the Administrator to run the affairs of the EAMUL in the afore-stated manner. It is a contention of the petitioner Society that the respondent no. 2 in colourable exercise of power and with a vested interest had passed the order purportedly in exercise of the powers under Section 29[4] of the Act. It is also the contention of the petitioner Society that in the order, it was reported that the Board of Directors had failed to run the State level co-operative Society but at no point of time, steps were taken as per Section 125 of the Act.

#14. It is noticed that the Tripartite Agreement dated 29.12.2015 was signed on behalf of the EAMUL i.e. the State Level Co-operative Society by Sri Ananda Chandra Dutta as the then Chairman of the EAMUL. It has been recorded in the Tripartite Agreement that the Tripartite Agreement was executed by the Government of Assam with a view to revive the EAMUL in the interests of milk producer members in particular and the Co-operative movement in general and the decision was taken to hand over the management of the EAMUL to the respondent no. 5 and the respondent no. 5 had, in turn, agreed to take over the management of the EAMUL under the terms and conditions set out in the Tripartite Agreement. The Tripartite Agreement had also recorded that the parties thereto had mutually agreed to the terms and conditions entered in the said Tripartite Agreement. It is also noticed that Sri Ananda Chandra Dutta as the then Chairman of the EAMUL wrote a letter under memo no. 285-289 dated 25.04.2016 to the Chairman of the respondent no. 5 inviting the respondent no. 5 to take over the management of the EAMUL at the earliest as he was worried about the delay occurred in taking over the charge after signing of the Tripartite Agreement on 29.12.2015. Page No. 8/10

#15. The Board of Directors of the State Level Co-operative Society was formed from the elected representatives of the member primary co-operative societies. The then Chairman of EAMUL viz. Sri Ananda Chandra Dutta was elected as a member of the Board of Directors of the State level co-operative society i.e. the EAMUL as a representative from the petitioner Society and it was after his election, Sri Ananda Chandra Dutta was further elected as the Chairman of the EAMUL, the State level co-operative society. The collective body of the Board of Directors of the State level co-operative society represents the interests of all the affiliated member primary co-operative societies in the State level co-operative society. A decision taken by the Board of Directors of the State Level Co-operative Society is to be taken as the decision taken in the interests of all the member primary co-operative societies, affiliated to the State level cooperative society. The State level co-operative society was running as a loss making co-operative society despite the State Government holding 99.4% of the total share capital and despite receipt of substantial amounts from the State Government in the form of loans or grants. The State Government holding a substantial stake in the State level co- operative society had taken the decision to revive the State level co-operative society with the help, assistance and guidance of the respondent no. 5, which has been recognized as an Institution of National Importance. The contribution of the respondent no. 5 in the Co- operative Sector, more particularly, in the milk sector is well recognized.

#16. At this juncture, it is apposite to refer to sub-section [4] of Section 29 of the 2007 Act. As per sub-section [4] of Section 29, subject to the provisions of the 2007 Act and the bye- laws, the ultimate power of a co-operative society vests in the General Body. The supreme authority shall, however, vest in the State Government or the Registrar of Co-operative Societies, as the case may be, during the pendency of any loan or service to the society from the Government.

#17. From the aforesaid provision, it is clear that the supreme authority in connection with the affairs of a cooperative society vests with the State Government or the Registrar of Co- operative Society, as the case may be, during the pendency of any loan or service to the society from the Government. The fact that the EAMUL received loans from the Government and other aids from the Government were not denied by the petitioner Society. The Page No. 9/10 Government had extended an amount of ₹ 286.65 lakhs to the State level co-operative society apart from granting loan to the extent of ₹ 0.35 lakhs. The Chairman of the then EAMUL had agreed the terms and conditions set forth on the Tripartite Agreement by giving his consent therein. The then Chairman of the EAMUL had got elected to the Board of Directors and thereafter, as the Chairman of the State level co-operative society represented the interests of the petitioner Society and he also represented the interests of the petitioner’s society in the State level co-operative society. After according such consent to the Tripartite Agreement, it is not open for the petitioner Society, represented by the same person, to mount a challenge with regard to the arrangement entered through the Tripartite Agreement dated 29.12.2015 pursuant to a policy decision of the State Government to revive the State level co-operative society, which was consistently making loss despite receipt of substantial amounts from the State Government in the form of loans or grants, etc. As a stakeholder of

99.4% of the total share capital of the State level co-operative society, it is open for the State Government to take such a policy decision for revival of the State level co-operative society with the help, assistance and cooperation from the respondent no. 5. It is found that the then Chairman of the EAMUL had consented to the Tripartite Agreement at an earlier point of time as the then Chairman of the EAMUL but, at a later point of time, the same person by making a volte face purportedly representing the interests of the petitioner Society has mounted a challenge by this writ petition to the impugned order whereby the management of the State level co-operative society i.e. the EAMUL had been handed over to the respondent no. 5 pursuant to the policy decision of the State Government and the Tripartite Agreement dated

29.12.2015.

#18. It is also noted that earlier, another writ petition, W.P.[C] no. 3551/2016 [East Assam Milk Producer’s Co-Operative Union Limited, represented by its Chairman, Sri Ananda Chandra Dutta vs. State of Assam and others] was preferred. When the writ petition was taken up on

06.10.2019, it was found that the writ petition in the name of the EAMUL as the petitioner was not maintainable as the deponent who had sworn the affidavit in support of the writ petition viz. Sri Ananda Chandra Dutta did not have the power or authority to represent the EAMUL. By holding the said writ petition not maintainable, the Court granted liberty to any person who might be aggrieved by the order dated 02.05.2016 passed by the respondent no. 2, to seek appropriate remedy. Page No. 10/10

#19. The Tripartite Agreement was entered into with a view to revive the EAMUL in the interests of milk producer members and in the interests of the Co-operative movement related to milk sector in general. The petitioner Society has not been able to show by any tangible material in what manner the interests the petitioner Society have been effected in view of appointment of the respondent no. 5 as the administrator of EAMUL pursuant to the Tripartite Agreement for the period of 5 [five] years.

#20. There is another relevant aspect to this writ petition. The impugned order passed on

02.05.2016 but the writ petition assailing the said order was filed on 19.02.2019 without any explanation as to why there was a delay more than 2½ years in filling the writ petition. The writ petition is also found to be preferred after a prolonged period of inordinate and inexplicable delay of more than 2½ years and, thus, it has suffered on the aspects of delay and laches.

#21. In the light of the above discussion, this Court has not found any merit in this writ petition. As the writ petition is devoid of any merit, the same is liable to be dismissed. It is accordingly, dismissed. There shall, however, be no order as to cost. JUDGE Comparing Assistant