PATNA HIGH COURT
B.P.Singh and R.M.Prasad JJ.
Pillar State Co-operatire Marketing Union Ltd.
Versus
Indian Farmers Fertilizer Co-operatire
Civil Writ Jurisdiction Case No. 7303 of 1993 ;
Decided On : OCTOBER 15, 1993
WRIT PETITION - MAINTAINABILITY - MULTI-STATE CO-OPERATIVE SOCIETIES ACT, 1984 - SEC. 74 - INDIAN FARMERS FERTILIZER CO-OPERATIVE LTD. - DISQUALIFICATION OF MEMBER - RULE 19 - PUBLIC DUTY - ARTICLE 226 OF THE CONSTITUTION OF INDIA - CENTRAL REGISTRAR - CO-OPERATIVE SOCIETIES.
Fact of the Case:
The petitioner, Biscomaun, filed a writ petition challenging the resolution passed by the Board of Directors of the Indian Farmers Fertilizer Co-operative Ltd. (IFFCO) disqualifying Biscomaun from sending its nominee to the Board of IFFCO due to prolonged default under Rule 19 of the Multi-State Co-operative Societies Act, 1984.
Finding of the Court:
The court held that the writ petition was not maintainable on the following grounds: 1. IFFCO is not a state or an authority under Article 12 of the Constitution of India and is not amenable to the writ jurisdiction of the court. 2. The dispute between the petitioner and IFFCO regarding the disqualification of the petitioner's nominee is a private dispute and does not involve any public duty. 3. The petitioner has an equally convenient remedy under Section 74 of the Multi-State Co-operative Societies Act, 1984, by referring the dispute to the Central Registrar for settlement.
Issues: 1. Whether IFFCO is a state or an authority under Article 12 of the Constitution of India? 2. Whether the dispute between the petitioner and IFFCO involves any public duty? 3. Whether the petitioner has an equally convenient remedy under Section 74 of the Multi-State Co-operative Societies Act, 1984?
Ratio Decidendi: 1. The court held that IFFCO is not a state or an authority under Article 12 of the Constitution of India based on the following factors: * IFFCO is a co-operative society registered under the Multi-State Co-operative Societies Act, 1984. * The Government of India has subscribed only a small part of IFFCO's capital, which can also be retired. * The Government has no control over the management of IFFCO. * IFFCO's functions cannot be said to be the functions of a State. 2. The court held that the dispute between the petitioner and IFFCO does not involve any public duty based on the following factors: * The dispute relates to the internal management of IFFCO. * There is no evidence that IFFCO is required to perform any duty of a public nature. 3. The court held that the petitioner has an equally convenient remedy under Section 74 of the Multi-State Co-operative Societies Act, 1984, based on the following factors: * Section 74 provides a mechanism for the settlement of disputes between members and the Board of a co-operative society. * The dispute between the petitioner and IFFCO falls within the scope of Section 74.
Final Decision: The court dismissed the writ petition as not maintainable.
Radha Mohan Prasad, J.
1. This writ application has been filed for quashing the resolution of the Board of Directors of the Indian Farmers fertilizer Co-operative Ltd. , 34, Nehru Place, New Delhi, in its 206th meeting held on 14.5.1993 communicated by respondent no 2 vide his letter dated 15 5.1993 whereby and whereunder it has been resolved that in view of the prolonged default, the Biscomaun have incuned disqualification as per Rule 19 of the Multi-State Co-operative Societies Act, 1984 (hereinafter referred to as the Act) and that they will forfeit their right to send their nominee on the Board of the respondent Co-operative from the next Board meeting of the same till they clear all pending dues as arrived at settled mutually. Besides this, it was further resolved authorising the Managing director to take further necessary action as required under the provisions of the Act.
2. Mr. K. D. Chatterjee, learned Senior Counsel appearing on behalf of the respondent Co-operative has raised a preliminary objection as to the maintainability of the present writ application on the grounds that the respondent Co-operative is not state within the meaning of Article 12 of the Constitution of India and rather it is merely a Co-operative Society registered under the Act. Further, it has been contended by him that the respondent Co-operative is neither an agency nor instrumentality of the state. The other preliminary objection, as taken by Mr. Chatterjee, is that in view of section 74 of the Act, the writ petition is fit to be rejected on this score as well inasmuch as in view of the dispute which the management or business of the respondent Co-operative is subject to statutory determination under the aforesaid provision which envisages that any dispute touching the constitution, management or business shall be referred to the Central registrar, Co-operative Societies for decision.
3. The counter-affidavits have been filed on behalf of the respondents, one on behalf of respondents no.1 and 2 and the other on behalf of respondent no 2, sworn by the same person, namely, Senior Manager (Co-operative Services)Besides raising the aforesaid preliminary objections, the respondent Co-operative has also given the details of fact in support of the reasons for passing of the impugned resolution which we need not go into in the present case, in view of the order which We propose to pass in this case.
4. As regards the first question Mr. R. B. Mahto, learned Advocate-General appearing on behalf of the Biscomaun (petitioners) has at first ventured to submit that respondent no.1 is a state as the majority of the share capital is subscribed by the Government of India and other public financing institutions. Further, it has been contended that the Board of directors of respondent no.1 consists of different categories of Directors and five of them are to be nominated by the Government of India, financing agency or agencies providing long-term credit. Thus, even from the composition of the general body, Board of Directors and authorised paid up share capital of respondent no.1 all taken together the same is a state within the meaning of Article 12 of the Constitution of India and is thus amenable to the writ jurisdiction of this Court.
5. On the other hand, Mr. Chatterjee appearing for the Indian Farmers Fertilizer co-operative Limited (hereinafter referred to as iffco)has produced its registered Bye-laws, as amended up to May 11, 1992. Clause 3 of the said Bye-laws contains the objects, according to which its main object is to promote the economic interests of its members by undertaking manufacture of chemical fertilisers and its marketing. Clause 4 provides for the membership of IFFCO and clause 5 regarding the share capital.
6. It appears that the respondent Society being unique one was Initially started in the year 1967 with a huge capital of more than a million on experimental basis.
7. After going through the Bye-laws we feel satisfied that the
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