Point of Law: Public duty or function must be of a character that is closely related to the functions performed by the State in its sovereign capacity. Running the risk of pleonasm, it must be said the 2nd respondent is not even remotely discharging the sovereign functions.

ORDER :

The petitioner – Nandi Rythu Samakhya, Nandyal prays for writ of mandamus declaring the action of 2nd respondent alienating its Sugar factory and appurtenant lands covered by different survey numbers of Ayyalur Village, Nandyal Mandal, Kurnool District to third parties without considering the interest of the petitioner association as illegal, arbitrary and for such other orders.

2. The petitioner‘s case succintly is thus:

(a) Originally the Nandyal Cooperative Sugar Factory was established in the year 1973 under the A.P. Cooperative Societies Act, 1964 (for short 'APCS Act') at Nandyal by acquiring Ac.120.00 cents from various ryots. Several ryots, some of whom are the members of the petitioner society invested amount in the said Sugar Factory. The majority of the shares were held by the State Government.

(b) The said factory was closed down during the crushing season 1990-1991 on account of non-availability of raw material, high cost of production and fall in sugar price. In 1994-1995 the factory was restarted and again closed in 1996-1997. Its accumulated losses rose above the paid-up capital and in May 2001 the Registrar of Cooperative Societies, A.P. exercising the power vested in him under Section 12-A(1) of the APCS Act advertised for the sale of Nandyal sugar. Ultimately the 2nd respondent became the highest bidder and a Sale Deed dated 27.09.2003 was executed in favour of 2nd respondent for running the sugar mill. The members of the petitioner association contributed Rs.60.00 lakhs at the time of establishment of the sugar factory. So also, the farmers of the surrounding villages also contributed about Rs.40.00 lakhs as nonrefundable deposit with the Nandyal Sugar Factory. However, the Registrar of Cooperative Societies sold away the Sugar factory to 2nd respondent behind the back of the shareholders and the ryots. Some ryots and third parties filed writ petitions questioning the sale. However, those writ petitions were dismissed by this Court. Several thousands of sugar crane growers surrounding the sugar factory were depending on the sugar factory and cultivating the sugarcane.

(c) While so, due to recent escalation of the land value the 2nd respondent is not interested to run the sugar factory and trying to alienate the lands appurtenant to the sugar factory and making negotiations with private parties, in which case, the members of the petitioner association would suffer a lot.

Hence, the writ petition.

3. The 2nd respondent filed counter contending as follows:

(a) The 2nd respondent is a private entity i.e., a company registered under the Companies Act, 1956. Neither the State nor any of its instrumentalities have any share in the company. Therefore, the 2nd respondent will not fall within the definition of "State" under Article 12 of the Constitution of India. Hence, the writ petition seeking mandamus is not maintainable against 2nd respondent.

(b) The petitioner has no locus standi to file the writ petition. The petitioner allegation that the petitioner association consists of shareholders of Nandyal Cooperative Sugar Factory and crane growers is denied. The petitioner has not produced any particulars in proof of the said allegation. In any case no shareholder and crane grower has any right or interest to the properties or assets of the 2nd respondent company.

(c) The Nandyal Cooperative Sugar Factory was registered as a Cooperative Society under the A.P. Cooperative Societies Act, 1964. The majority shares to an extent of 92.97% were held by the State Government. The factory was commissioned in April 1981 with an installed capacity of 1250 TCD and it was closed down in crushing season of 1991 on account of non-availability of raw materials, high cost of production, fall in sugar prices. There was no crushing season in 1990- 1991, 1992-1993, 1993-1994 and from 1996-1997 till May 2001. The IFFCO to whom the assets were mortgaged operated the Unit briefly. As they accumulated losses shot of twice the share capital,