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IN THE HIGH COURT OF BOMBAY, AURANGABAD BENCH
S.C. Dharmadhikaru, Mangesh S. Patil, JJ.
Maharashtra State Co-operative Consumers Federation Ltd. – Petitioner
Versus
The State of Maharashtra, Through the Secretary to Government Medical Education and Drugs Department & Anr. – Respondents
Writ Petition No. 10288 of 2015
Decided On : 07-06-2017
Mandamus - Maharashtra Cooperative Societies Act, 1960 - Summary of Acts and Sections: Maharashtra Cooperative Societies Act, 1960 - The court discussed the provisions of the Maharashtra Cooperative Societies Act, 1960, particularly the terms and conditions incorporated in the Government Resolution dated 2/3/2009 and the agreement executed with the Federation. The court also referred to the principles of fairness, reasonableness, and non-arbitrariness as envisaged by Article 14 of the Constitution of India. The court highlighted the State's duty to provide health care facilities and maintain them for the welfare and well-being of the public at large. The judgment also referenced the principles of equality before the law and equal protection of law. The court emphasized the State's obligation to act fairly, reasonably, and in adherence to the rule of law, even in contractual matters. The judgment discussed the State's power to review and modify policy decisions to sub serve larger public interest. The court also referred to specific terms and conditions imposed on the petitioner in the Government Resolution and the agreement, including the obligation to sell drugs and medicines at rates below the market rates and the prohibition on involving third parties in dispensing and distributing drugs. The judgment highlighted the State's authority to terminate a contract if it finds that the arrangement has not served its purpose and the premises have been allowed to be utilized by third parties. The court also discussed the State's power to recall and review its decision based on definite material. The judgment referenced the State's duty towards the public and the directive principles of State policy. The court also distinguished the case from previous judgments and emphasized the need for the State to act within the framework of the Constitution of India. The judgment concluded by dismissing the Writ Petition.
Fact of the Case:
The petitioner, a society registered under the Maharashtra Cooperative Societies Act, 1960, sought a writ of mandamus or any other writ, order, or directions directing the respondents to quash or not to act upon a decision dated 5/10/2015. The petitioner claimed that it was authorized to distribute medicines and drugs to patients at affordable rates and prices based on a Government Resolution dated 2/3/2009 and an agreement executed with the Federation. The State terminated the contract, citing a change in policy and unauthorized induction of third parties by the petitioner.
Finding of the Court:
The court found that the State had the authority to review and modify policy decisions to sub serve larger public interest. It concluded that the State's decision to terminate the contract was not arbitrary and did not contravene the principles of fairness, reasonableness, and non-discrimination as envisaged by Article 14 of the Constitution of India. The court emphasized the State's duty to provide health care facilities and maintain them for the welfare and well-being of the public at large. The judgment highlighted the State's obligation to act fairly, reasonably, and in adherence to the rule of law, even in contractual matters. The court also referred to the State's power to recall and review its decision based on definite material.
Issues: The issues involved in the case included the authority of the State to terminate a contract, the petitioner's compliance with the terms and conditions of the Government Resolution and the agreement, and the State's duty to provide health care facilities for the welfare of the public at large.
Ratio Decidendi: The court's decision was based on the State's authority to review and modify policy decisions to sub serve larger public interest, the petitioner's non-compliance with the terms and conditions of the Government Resolution and the agreement, and the State's duty to provide health care facilities for the welfare of the public at large. The judgment emphasized the State's obligation to act fairly, reasonably, and in adherence to the rule of law, even in contractual matters.
Final Decision: The Writ Petition was dismissed by the court.
S.C. Dharmadhikari, J.
Rule. Rule made returnable forthwith. Learned Assistant Government Pleader waives service for respondents 1 and 2. By consent Petition is heard finally.
2. By this petition under Article 226 of the Constitution of India, the petitioner is seeking writ of mandamus or any other writ, order or directions thereof directing the respondents to quash or not to act upon a decision dated 5/10/2015 copy of which is at Annexture "J" to the petition.
3. The Writ Petition essentially prays for calling the records and proceedings and thereafter the directions as above.
4. The petitioner is a society registered under the provisions of the Maharashtra Cooperative Societies Act, 1960. It is claimed that the Government has control over the affairs of this petitioner in the sense that its share capital is substantially held by the State Government. The petitioner Federation has claimed that it is under total of State Government.
5. The first respondent is the State and exercised powers through its Secretary, Department of Medical Education and Research, Government of Maharashtra, Mumbai and the second respondent is the Director of Medical Education and Research.
6. In para 2 of the Petition, the petitioner makes reference to a Public Interest Litigation No. 3427/2000 filed before the Nagpur Bench of this Court. The issue involved therein is of providing medicines to the patients taking treatment at public hospitals. This Court was pleased to appoint a committee known as Bhagwati Committee. The Court directed that said Committee shall prepare a report and submit it to the Court. Thereafter, based on its recommendation, this Court directed the Maharashtra Government to take specific action.
7. Acting on the basis of the order passed by this Court and report, the Government took a decision on 2/3/2009 that the petitioner shall be handed over premises or shops in the compound of Government hospital/medical colleges for distributing medicines and drugs to the patients at affordable rates and prices.
8. The petitioner relies upon this Government Resolution copy of which is annexed at Exh.A and submits that it was authorised to purchase, store, sell and establish the independent channel for running said shops. The petitioner then took a decision and appointed independent/separate channels for running the shops. The Federation therefore, claims that it was running the shops.
9. An agreement was executed with this Federation by Government in pursuance of the G.R. dated 2/3/2009 and the terms and conditions incorporated therein are relied upon. It states that if there is any dispute between the parties then it will be resolved by mutual understanding. If there is no solution found at such mutual exchange or meeting then recourse can be taken to Arbitration. It is submitted that the duration of this agreement was for ten years. Thus for ten years the petitioner could have distributed the drugs and medicines from the shops set up.
10. The petition then states that this decision was wrongly taken by the State, particularly when it defended a Writ Petition filed by one Sunil Choudhari being Writ Petition No. 6187/2010. That petition was filed before this Court at its bench at Aurangabad. The Government defended the action by stating that it was acting in terms of this Court's order and direction in the above P.I.L. and that the dispensation and distribution of the drugs is initiated by the Government itself. The State has not delegated its powers and functions or duty particularly of sub-serving larger public interest. It is the Government according to the petitioner which had decided to sell the drugs at the rate or price cheaper than the market so that those who need the drugs and medicines are not adversely affected and can purchase the same at the said shops. The purpose of putting up of such shops in public and Government hos
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