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2018 Supreme(J&K) 722
IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
Alok Aradhe and Dhiraj Singh Thakur, JJ.
The Milk Producers Cooperative Marketing Processing Ltd. and Anr. - Petitioners
Versus
Union of India and Ors. - Respondents
LPAOW No. 34 of 2018, IA No. 1 of 2017 c/w LPAOW No. 20 of 2018, IA Nos. 1 of 2017 and 2 of 2018
Decided On : 16-10-2018
For the Appellants :Mr. Altaf Naik, Sr. Advocate and Mr. M.A. Qayoom, Advocate
For the Respondents:Mr. Tahir Majid Shamsi, ASGI with Mr. Abid Kathu and Mr. Pranav Kohli, Advocates
Important Point – Requirement of affiliation with NCDFI acts as a check on unscrupulous traders.
Headnote:Government Contract – Scope of Judicial Review – Multi – State Cooperative Societies Act, 2002 – Section 25 – Court would not ordinarily interfere with policy decision of executive unless same can be faulted on grounds of malafides, unreasonableness, arbitrariness or unfairness in which case policy would render itself to be declared unconstitutional – Requirement of affiliation with NCDFI acts as a check on unscrupulous traders – Condition of affiliation cannot be said to be either arbitrary or irrational but prescribed in public interest – Condition being regulatory also cannot be said to impede conduct of business of appellants who can still participate if they otherwise satisfy eligibility conditions of affiliation after satisfying requisite conditions and proving its bonafides as a cooperative society – Appeals dismissed. (Paras 26, 36, 40, 41 and 42)
Result – Letters Patent Appeals dismissed.
Dhiraj Singh Thakur, J.
These Letters Patent Appeals have been preferred against a common judgment and order dated 26.03.2018, whereby the petitions filed by the appellants have been dismissed.
02. Briefly stated, the material facts are as under:-
03. Appellant No. 1, i.e., the Milk Producers Cooperative Marketing Processing Ltd. is a Cooperative Society of Milk Producers, registered under the J&K Self Reliant Cooperatives Act, 1999 and appellant No. 2, i.e., the Jammu & Kashmir Cooperative Union Ltd. (JKCUL) is a society registered under the Jammu & Kashmir Cooperative Societies Act, 1989.
04. The Ministry of Defence is one of the largest procurers of milk and milk products in the country. With a view to ensure supplies to the Army, the Government of India, Ministry of Defence vide communication dated 17.01.2005 authorized the army to procure their requirement of milk and milk products from National Cooperative Dairy Federation of India (NCDFI)/State Milk Cooperative Federation/Government Milk Schemes.
However, in terms of communication dated 13.05.2005, sanction was accorded to the extension of the provisions of the aforesaid letter in the case of Military Farms located in Jammu & Kashmir, J&K Dairy Producers, Processors and Marketing Cooperative Union Limited (JKDCUL) Jammu, a registered Cooperative Society with the Government of Jammu & Kashmir, under the same terms and conditions.
05. Subsequently, communication dated 24.11.2005 was issued to the effect that Cooperative Milk Federations duly recognized by the Government of India, Ministry of Defence and belonging to J&K State, would only be eligible to participate in the tendering for supply of milk and milk products to Military Farms located in Jammu & Kashmir and quantities not supplied through local federation would be sourced from federation/Cooperatives not belonging to Jammu & Kashmir State, who are NCDFI members.
Vide another communication dated 21.07.2006, sanction of the President was conveyed to extend the provisions of Government letter dated 17.01.2005 in the case of Military Farms located in Jammu & Kashmir to the Milk Producers Cooperative Marketing and Processing Limited (MPCMPL), under the same terms and conditions. It appears that based upon these communications, the Army used to enter into negotiated contracts for supply of milk and milk products including the appellants. Vide communication dated 10.08.2015, the policy earlier followed was reiterated in regard to the negotiated contracts with NCDFI
06. Vide communication dated 10.08.2015, the policy earlier followed was reiterated in regard to the negotiated contracts with NCDFI and State Cooperative Milk Federations/NDDB/ J&K Dairy Producers, Processors and Marketing Cooperative Union Limited (JKDCUL) for the State of J&K. According to paragraph 12 of the aforesaid communication, the provisions contained in the letter were to remain valid for a period of three years, w.e.f., 01.10.2015. it was envisaged that the issue would be reviewed thereafter, based on the experience of supply of the organizations mentioned therein, having regard to reliability of supply, reasonableness of rates and the availability of milk and milk products from outside the Cooperative sector.
First round of litigation
07. Contrary to the practice earlier adopted in the year 2014, vide communication dated 21.11.2014 tenders were invited for supply of milk from the open market. Being aggrieved OWP No. 1707/2014 was preferred, wherein vide order dated 04.12.2014 operation of the impugned notice dated 21.11.2014 was stayed. Subsequently, it appears that during the pendency of the said writ petition, the impugned communication was withdrawn and a statement was made in that regard in the Court. Thereafter the petition having been rendered infructuous was disposed of. What was stated by the court in the said order dated 29.12.2014 was thus:-
“Ld. Counsel for the respondents states that the communication dated 21.11.2014 impugned i
