The main legal point established in the judgment is the validity and binding nature of the directions issued under Section 181 of the Tamil Nadu Co-operative Societies Act, emphasizing the necessity to comply with such directions and upholding the policy decision of the Government to convert traditional milk supply societies into producer societies, considering the interests of the society and the public.

The President of Rajapalayam Milk Co-operative Society, Rajapalayam has challenged G.O. (Ms.) No. 236, Animal Husbandary and Fisheries (MP.II) Department, dated 211. 1999, by which, the Government have rejected the appeal, dated 10. 1998, against the order of the Commissioner/Registrar for Milk Production and Dairy Development Department, Chennai, third respondent, dated 29. 1989, by which, the said respondent has issued directions, purporting to be under Section 181 of the Tamil Nadu Co-operative Societies Act, 1983, for conversion of the said Milk Supply Society, in which, the petitioner is a member to a Consumer Society.

2. According to the petitioner, the Rajapalayam Milk Co-operative Society, Rajapalayam, was formed with the principle object to enable its members to maintain good milk animals to arrange for the purchase of the milk produced by the members of the Society and sell them to general public, thereby, acting as an agent of the members of the Society and for general upliftment and welfare of its members. Consistent with the objectives, the Society had been functioning for nearly seven years. It is also the contention of the petitioner that the Society has been arranging for loans to be given to its members from Nationalised Banks for the purchase of milch cattle, besides giving cattle feeds on credit basis.

.3. It is the further case of the petitioner that the area of operation of the Society extends to the whole of Rajapalayam Town, apart from the neighbouring villages extending to 18 Kms. The Society has 17 branches in Rajapalayam Town and 35 branches in the neighbouring villages. Milk produced by the members within the area of operation of Society is procured through its employees at various branches, brought to the Headquarters and distributed to the general public through its employees.

.According to the petitioner, the milk so procured and supplied by the Society is of high quality, conforming to the requirements and standards prescribed by the authorities.

4. The petitioner has further submitted that in 1978, the Government have issued orders in G.O. Ms. No.1000 Agriculture Department, dated 6. 1978, to effect that it had decided that the organisation pattern for the development of the Dairy Industry in Tamil Nadu should be based on “Anand pattern” of producers’ Society at the village level, District level and ultimately at the State level. By the said Government Order, the Government had decided that the existing traditional milk supply societies should be converted into producers societies in an orderly way, avoiding financial and administrative dislocation. In the said order, the Government have also expressed the decision that organised societies should be formed to handle only distribution of milk.

5. Thepetitioner has further submitted that though the above said orders were issued in 1978, no effective steps were taken to implement the said G.O. The only action that had been taken by the concerned authorities in this regard was to ask the societies to send a proposal approved by their General Body to convert themselves into a milk producers Co-operative Societies. Insofar as the petitioner’s Society is concerned, the general body of the Society had unanimously resolved to turn down the proposed and requested the authorities to enable the Society to continue as a producers-cum-supply Society.

6. While bethe case, by impugned order, dated 29. 1989, Commissioner/Registrar for Milk Production and Dairy Development Department, third respondent herein, issued directions to Rajapalayam Milk Co-operative Society, Rajapalayam, purporting to be issued under Section 181 of the Tamil Nadu Co-operative Societies Act, directing conversion of the said Society into a milk consumers co-operative Society. By the said order, the Society has been prohibited from purchasing milk and further directed to function only as a milk consumers Co-operative Society, and supply milk to the consumers to be purchased