2004 Supreme(All) 1075
2004 (5) AWC 3801
(ALLAHABAD HIGH COURT)
M. Katju and R. S. Tripathi, JJ.
Special Appeal No. 649 of 1999, connected with other special appeals
Decided on May 31, 2004
Kisan Sahkari Chini Mills Ltd.
Versus
Rakesh Chandra Gangwar and others
Counsel for the Appellants : A. K. Mishra, S. P. Kesarwani and A. K. Singh.
Counsel for the Respondents: Ashok Khare and U. N. Sharma, S.C.
Headnote:
State Control - Co-operative Societies - U. P. Co-operative Societies Act - 9, 12, 26, 27, 28, 31A, 34, 35, 38, 44, 48, 58 - The court discussed the validity of the orders terminating the services of the writ petitioners employed by co-operative societies under the U. P. Co-operative Societies Act. The court examined the nature of the co-operative societies, their autonomy, and the extent of State control over their administration. It concluded that the co-operative societies were not performing public duties and did not have deep and pervasive State control, thus not falling under the definition of 'State' under Article 12 of the Constitution.
Fact of the Case:
The respondents challenged the validity of the orders terminating their services, arguing that the co-operative societies were State under Article 12 of the Constitution. The court found that the co-operative societies were not performing public duties and did not have deep and pervasive State control, thus not falling under the definition of 'State' under Article 12 of the Constitution.
Finding of the Court:
The court found that the co-operative societies were not performing public duties and did not have deep and pervasive State control, thus not falling under the definition of 'State' under Article 12 of the Constitution. It also held that the writ petitioners had an alternative remedy under the Industrial Disputes Act and should have raised an industrial dispute instead of filing a writ petition.
Issues: Validity of orders terminating the services of the writ petitioners employed by co-operative societies under the U. P. Co-operative Societies Act. Whether the co-operative societies were State under Article 12 of the Constitution.
Ratio Decidendi: The co-operative societies were not performing public duties and did not have deep and pervasive State control, thus not falling under the definition of 'State' under Article 12 of the Constitution. The writ petitioners had an alternative remedy under the Industrial Disputes Act and should have raised an industrial dispute instead of filing a writ petition.
Final Decision: The impugned judgment of the learned single Judge was set aside, and the appeals were allowed.
M. Katju, J.—This bunch of special appeals is directed against the judgment of the learned single Judge dated 28.5.1999 in Civil Misc. Writ Petition No. 38619 of 1998, Rakesh Chandra Gangwar v. State of U. P. and others connected petitions.
2. We have heard the learned counsel for the parties and have perused the record.
3. The respondents in these appeals (writ petitioners) have questioned the validity of the orders terminating their services. The learned single Judge by the impugned judgment has allowed the writ petitions and has quashed the impugned orders. Hence these appeals.
4. A preliminary objection had been raised before the learned single Judge that the writ petitions were not maintainable as the employers of the writ petitioners were co-operative societies which were not State under Article 12 of the Constitution. The learned single Judge rejected the preliminary objection and held that there was deep and pervasive State control over the affairs of every co-operative society registered under the U. P. Co-operative Societies Act. He further held that the Co-operative Societies were performing duties of a public nature.
5. With great respect to the learned single Judge we cannot agree that the Co-operative Societies were performing functions of a public nature. The Co-operative Societies were sugar mills which were manufacturing sugar. Thus, they were performing a purely business activity and not any public duty. Also, the observation of the learned single Judge that there is deep and pervasive control by the State over all co-operative societies registered under the Co-operative Societies Act is not based on any material on record.
6. In similar circumstances the Supreme Court in General Manager, Kisan Sahkari Chini Mills Ltd., Sultanpur v. Satrughan Nishad and others, 2003 (6) AWC 5254 (SC) : (2004) 1 UPLBEC 7 held that the Kisan Sahkari Chini Mills Limited, Sultanpur was not State under Article 12 of the Constitution. In paragraph 8 of this judgment the Supreme Court noticed that the U. P. Government held only 50% share in the mill which was not denied. The membership of the Co-operative Society consisted of the cane growers, other societies, Gram Sabha, State Government, etc. Out of the members of the Committee of Management of the Co-operative Society only 1/3rd were nominees of the State Government while 2/3rd were non-Government members. Under the bye-laws of the society, the State Government could not issue any direction to the mill nor determine its policy, as it was an autonomous body. The Court held that the State had no control at all in the functioning of the mill, much less a deep and pervaisive one. The Supreme Court further held that the mill was engaged in the manufacture and sale of sugar which does not involve any public function. In our opinion the decision of the Supreme Court squarely applies to the facts of the present case which also relates to Kisan Sahkari Chini Mills Limited of different areas.
7. A similar view was taken by a Division Bench of this Court in Anil Kumar Agarwal v. U. P. Stock Exchange Association Ltd., 2004 (1) AWC 1615 : 2004 ALJ 365.
8. A Full Bench of this Court while considering the issue as to whether a co-operative society is amenable to writ jurisdiction in Radha Charan Sharma v. U. P. Co-operative Federation, 1982 UPLBEC 89, considered a catena of judgments of the Supreme Court and other courts and came to the conclusion that the U. P. Co-operative Federation was not amenable to writ jurisdiction as the bye-laws framed by the co-operative society did not have any statutory force and no rule involving a duty of public nature was violated.
9. In Ram Lakhan Pathak v. District Assistant Registrar, Co-operative Societies, Kanpur, 1996 (1) AWC 20 : 1996 (1) ESC 32, this Court held that since the conditions of service of the employees are not governed by any statutory rule or regulation, the co-operative society is not an authority within the meaning of Articl