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2021 Supreme(AP) 1031

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
ARUP KUMAR GOSWAMI, NINALA JAYASURYA, JJ.
State of A.P. rep. by its Special Chief Secretary, Animal Husbandry, Dairy Development and Fisheries (Dy.&Vig) Department – Appellant
Versus
Sangam Milk Producers Company Limited - Respondents.
Writ Appeal No.281 of 2021
Decided on : 01-09-2021

Advocates:
Advocate Appeared:
For the Appellant :Mr. S. Sri Ram, Advocate General
For the Respondent: Mr. B. Adinarayana Rao, Sr.Counsel for Mr. Srinivasa Rao Bodduluri, Mr. G.L. Nageswara Rao, Mr. K. Appa Rao, Standing Counsel

Headnote:

Constitution of India,1950 - Articles 226, 162 and 300-A - MACS Act - Sections 4(3)(e), 4(1) and 4(1A) - Companies Act, 1956 - Section 581-J - mortgaged, transferred - payments of statutory dues and contractual obligations - interim suspension - Petitioner shall be entitled to continue in management and control of the petitioners’ union posting of an IAS officer would lead to administrative difficulties particularly as the petitioner is a process industry requiring special expertise - Court directs that the administration and management shall continue to be exercised by the Directors of the company and the Sub Collector shall not be present in the premises or take part in operations/administration - Board shall not except with the permission of this Court create any further charge, encumbrance etc., on the properties - All future transactions by which the movable and immovable assets of petitioners are sought to be alienated, mortgaged, transferred etc., should be with prior permission of the court - Normal business activities of 1st petitioner – Buying, processing and selling of milk and milk products shall be continued by 1st petitioner without any hindrance – Held, State perceived that there was depletion of assets at hands of the writ petitioners, learned single Judge, while suspending impugned G.O., maintaining status quo with regard to existing state of affairs, protected interest of the State by laying down a condition that Board of writ petitioner No.1 shall not, except with permission of the Court, create any further charge, encumbrance etc. on properties and that all future transactions by which the movable and immovable assets of writ petitioners are sought to be alienated, mortgaged, transferred etc., should be with prior permission of Court, thereby sub-serving public interest. As by impugned G.O., State had sought to unilaterally take over the management of Feeder Balancing Dairy and had deputed a Sub-Collector to run its operations - Learned single Judge had considered the matter in right perspective in exercise of discretionary power to grant interim order in light of established principles and finally balanced the competing equities during pendency of writ petition by protecting the interest of both parties and, therefore, we see no good ground to interfere with the order under challenge - Writ appeal is dismissed.

JUDGMENT :

Arup Kumar Goswami, J

Heard Mr. S. Sri Ram, learned Advocate General for the appellant.

Also heard Mr. B. Adinarayana Rao, learned Senior Counsel appearing for respondent Nos.1 and 2.

2. This writ appeal is preferred against an interim order dated 07.05.2021 passed by the learned single Judge in I.A.No.1 of 2021 in W.P.No.9279 of 2021. The operative portion of the order reads as follows:

    “Therefore, this Court is of the opinion that interests of justice would be met if the following order is passed.

1. There shall be an interim suspension of G.O.Ms.No.19 Animal Husbandry, Dairy Development & Fisheries (Dy.Vig) Department, dated 27.4.2021.

2. The 1st petitioner shall be entitled to continue in the management and control of the petitioners’ union.

3. However, the posting of an IAS officer would lead to administrative difficulties particularly as the petitioner is a process industry requiring special expertise. Therefore, this Court directs that the administration and management shall continue to be exercised by the Directors of the company and the Sub Collector Tenali shall not be present in the premises or take part in the operations/administration.

4. Regular day to day activities, the payment of salaries, payments of statutory dues and contractual obligations etc., shall be carried out as before by the 1st petitioner only.

5. However, the Board shall not except with the permission of this Court create any further charge, encumbrance etc., on the properties. All future transactions by which the movable and immovable assets of the petitioners are sought to be alienated, mortgaged, transferred etc., should be with the prior permission of the court.

6. The normal business activities of the 1st petitioner – buying, processing and selling of milk and milk products shall be continued by the 1st petitioner without any hindrance.

In view of the fact that I.A.No.1 of 2021 is allowed and G.O.Ms.No.19 Animal Husbandry, Dairy Development & Fisheries (Dy.Vig) Department, dated 27.4.2021, is suspended with certain directions no further orders are immediately called for in I.A.No.2 of 2021.

The opinions expressed in this order are prima facie opinions for the disposal of this application only. With the above observation, this interlocutory application is allowed.”

3. The writ petition was filed questioning G.O.Ms.No.19, Animal Husbandry, Dairy Development & Fisheries (Dy.&Vig.) Department, dated 27.04.2021, whereby the Government of Andhra Pradesh had withdrawn G.O.Ms.No.515, Forest and Rural Development (Corporation) Department, dated 17.07.1978 and had issued certain directions with regard to the functioning of the Feeder Balancing Dairy, Sangam Jagarlamudi, popularly known as Sangam Dairy.

4. In order to understand the contentions advanced by the learned counsel for the parties, it will be appropriate to briefly take note of the case projected in the affidavit in support of the writ petition:

    (i) With a view to achieve the objects of ‘Operation Flood’ which was launched by the Government of India on 13.01.1970, the Government of composite State of Andhra Pradesh had incorporated the Andhra Pradesh Dairy Development Corporation (for short, ‘APDDC’) as a Government company on 02.04.1974. A programme was taken up as ‘Milk Shed Programme’ comprising of the districts of Guntur, Krishna, East Godavari and West Godavari. Under the said programme, the State Government had decided to establish a Feeder Balancing Dairy at Sangam Jagarlamudi, Guntur District, vide G.O.Ms.No.1222 dated 09.11.1973 at an estimated cost of Rs.168 lakhs with a handling capacity of 1.50 lakh litres per day. For the purpose of establishing the said Feeder Balancing Dairy, the milk producers of Guntur District, who were the members of Vijayawada Milk Products Factory, had contributed Rs.1.20 lakhs for purchasing Ac.32.22½ cents of land in Vadlamudi, which adjoins Sangam Jagarlamudi Village. However, the sale deeds were obtained in the name of Milk Commissioner, Andhra Pradesh,

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