Cherummood Ksheerolpadaka Sahakarana Sangham Limited v. The Director, Diary Development Department, Kerala State; The Deputy Director, Diary Development Department; The Diary Development Officer, Cherummood; The State of Kerala represented by the Principal Secretary, Agriculture (Dairy) Department; The Vellimon Ksheerolpadaka Sahakarana Sangham

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE THURSDAY, THE 3RD DAY OF JANUARY 2013/13TH POUSHA 1934 WP(C).No. 1716 of 2011 (L) -------------------------- PETITIONER(S): -------------- CHERUMMOOD KSHEEROLPADAKA SAHAKARANA SANGHAM LIMITED NO.Q-48, EDVATTOM, VELLIMON P.O., KOLLAM, REPRESENTED BY ITS PRESIDENT P.JAGANADHAN, LAKSHMI VIHAR, EDAVATTOM, VELLIMON P.O., KOLLAM-691511. BY ADV. SRI.B.MOHANLAL RESPONDENT(S): -------------- 1. THE DIRECTOR, DIARY DEVELOPMENT DEPARTMENT, KERALA STATE, PATTOM, THIRUVANANTHAPURAM-4. 2. THE DEPUTY DIRECTOR, DIARY DEVELOPMENT DEPARTMENT, BEACH ROAD, KOLLAM-1. 3. THE DIARY DEVELOPMENT OFFICER, CHERUMMOOD, VELLIMON P.O., KOLLAM DISTRICT, PIN-691511. 4. STATE OF KERALA REPRESENTED BY THE PRINCIPAL SECRETARY, AGRICULTURE (DAIRY) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-1. 5. THE VELLIMON KSHEEROLPADAKA SAHAKARANA SANGHAM, VELLIMON P.O., KOLLAM, REPRESENTED BY ITS CHIEF PROMOTER SRI. SURESH KUMAR, S/O THULASEEDHARAN PILLAI, AGED 42 YEARS, PALICHAZHIKATHU VEEDU, VELLIMON (W) P.O., KOLLAM- 691 511. WP(C).No. 1716 of 2011 (L) BY GOVERNMENT PLEADER SRI.T.R.RAJESH R4 & R5 BY ADVS. SRI.V.JAYAPRADEEP SMT.V.V.RISANI SRI.SANEESH KUNJUKUNJU THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03-01-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: DSV/- WP(C).No. 1716 of 2011 (L) ## APPENDIX PETITIONER'S EXHIBITS : P1 COPY OF THE RELEVANT PAGES OF THE BYE-LAW OF THE PETITIONER SOCIETY. P2 COPY OF THE NOTICE OF INAUGURATION OF THE SUB CENTRE AT VELLIMON, KOLLAM. P3 COPY OF THE LETTER DATED 26.11.2010 ISSUED BY THE 2ND RESPONDENT TO A MEMBER OF THE PETITIONER SOCIETY. P4 COPY OF THE RESOLUTION NO.4 DATED 06.12.2010 PASSED BY THE PETITIONER SOCIETY. P5 COPY OF THE COMMUNICATION NO.R1-R7/10 DATED 20.12.2010 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. P6 COPY OF THE GAZETTE NOTIFICATION G.O.(P) NO.94/2010/AD DATED 16.04.2010 ISSUED BY THE GOVERNMENT. RESPONDENTS' ANNEXURES : R4(A) COPY OF THE GO(P)94/2010/AD DTD. 16.04.2010. R4(B) COPY OF THE LETTER DTD.12.11.2010 OF THE R2. R4(C) COPY OF THE NOTICE DTD.16.11.10. R4(D) COPY OF THE MINUTES OF THE FORMATION MEETING AND FIRST PROMOTING COMMITTEE MEETING. R4(E) COPY OF THE RECEIPTS DTD.01.02.2011 AND 29.01.2011. // TRUE COPY // P.A. TO JUDGE DSV/- ## **A.M.SHAFFIQUE, J * * * * * * * * * * * * *** W.P.C.No.1716 of 2011 ---------------------------------------Dated this the 3[rd] day of January 2013 ## **J U D G M E N T** The petitioner challenges Ext.P6 order issued by the Government exempting the additional 5[th] respondent Society to be registered in ward Nos. 1 and 2 of Perinad Panchayath in Kollam district overlapping the said area originally registered as area of operation of the petitioner Society, exercising the power under Section 101 of the Kerala Co-operative Societies Act. 2. The facts involved in the case disclose that the petitioner Society was registered in the year 1954 and admittedly their area of operation included ward Nos. 1 and 2 of Perinad Panchayath. As per Clause (c) of Sub Section (1) of Section 7 of the Kerala Co-operative Societies Act (hereinafter referred to as the Act), the Registrar, while exercising the right to register the Society and its Bye-law shall satisfy itself that the area of operation of the proposed society and the area of operation of another society of smaller type do not overlap. Since there is overlapping for registration of the additional 5[th] W.P.C.No.1716/2011 2 respondent Society, the impugned order came to be passed. 3. In fact, when the writ petition was filed, the petitioner Society was not aware of the impugned order. The writ petition is filed on the apprehension that steps were being taken by the official respondents to register the Society overlapping ward Nos.1 and 2 and seeking to quash any such proceedings. Subsequently, additional 5[th] respondent got itself impleaded by virtue of order passed in I.A.No.19815/2011 produced along with the said application, the Government Order as Annexure Ext.R4 (a). The writ petition is subsequently amended challenging the said Government Order which is Ext.P6. 4. The main contention urged by the petitioner to challenge Ext.P6 is that, when there is a statutory provision which precludes registration of a society overlapping the area of operation of another society though the Government can exercise power of granting exemption under Section 101 of the Act the said power has to be exercised fairly and reasonably and cannot be an arbitrary exercise of power. 5. It is also contended that before exercising such power, Government is bound to hear the petitioner Society who W.P.C.No.1716/2011 3 is the aggrieved person and therefore Ext.P6 is in gross violation of the principles of natural justice. 6. The official respondents had filed a counter affidavit inter alia contending that the exercise of power under Section 101 of the Act was done in public interest as about 25 milk producers in ward Nos.1 and 2 of Perinad Panchayath made a request for formation of new diary Co-operative Society in that area to cater their needs as the petitioner Society now functioning in the said area is not easily accessible to them. It is therefore the contention that in public interest the Government had permitted the Registrar and the Director of Diary Development Department to register a new Co-operative Society exclusively for the diary farmers residing in ward Nos.1 and 2 of Perinad Grama Panchayath. It is also stated that the said power has been exercised in view of the guidelines issued by the Government in respect of Primary Co-operative Society as per Circular No.19491/D2/7/AD dated 26/5/1997 wherein it is stated that the area of operation in respect of APCOS should not exceed two wards of a Grama Panchayath and in respect of the petitioner Society it was having 15 wards within its area of W.P.C.No.1716/2011 4 operation. It is also stated that a new milk society will be more beneficial to the diary farmers in Ward Nos.1 and 2 of Perinad Grama Panchayath. 7. Additional 5[th] respondent has also filed a counter affidavit inter alia contending that the writ petition is filed on 24/01/2011 without disclosing the fact that the Government of Kerala had already passed an order under Section 101 of the Act as early as on 16/4/2010 and necessary gazette publication has been made on 29/10/2010 exempting 'Vellimon Sangham' from Section 7(1)(c) of the Act. It is further contended that the number of cattle and diary farmers increased cumulatively since 1954 when the Petitioner Society was formed and the said Society now occupies 15 wards in a radius of 6 Kms and in view of the ever increasing demands of diary farmers, the Government had interfered in the matter. 8. Learned counsel for the additional 4[th] respondent also points out on the basis of communication dated 12/11/2010 by the Deputy Director in-charge of the Diary Development Department to the Diary Development Officer, that a new diary development society is to be formed in ward Nos.1 and 2 of W.P.C.No.1716/2011 5 Perinad Panchayath and for that purpose, necessary meetings are to be convened. Annexure R4(c) is the notice dated 16/11/2010 published by the Diary Development Officer calling upon the farmers in the area to attend a meeting which was convened on 23/11/2010 in order to consider the formation of new society in ward Nos.1 and 2. Annexure R4(d) is the Minutes of the said meeting and Annexure R4(e) are the chalans dated 29/01/2011 and 01/02/2011 showing the payment made for the purpose of Registration. It is therefore the contention of the additional 5[th] respondent that despite the fact that existence of Ext.P6 was notified in the gazette the petitioner had deliberately approached this Court without impleading additional 5[th] respondent which amounts to concealment of material facts. 9. After amendment of the writ petition, 2[nd] respondent has filed another counter affidavit reiterating the earlier statements and also contending that there is no mala fides in the action of the Government in issuing Ext.P6 and it was done in public interest taking into consideration the requirements of all the farmers in the said area and the exercise of power is in accordance with the provisions in the Act. It is also indicated W.P.C.No.1716/2011 6 that presently the milk collection centre of Cherummoodu Diary Cooperative is functioning without the sanction of Diary Development Department, in the area of the proposed Vellimon Ksheerolpadaka Sahakarana Sangham. Still further it is contended that the opinion of the petitioner society was called for regarding the formation of new milk society comprising of ward Nos. 1 and 2 and it is based on the applications submitted by 25 Milk producers in the area and on the basis of guidelines issued earlier a new society was formed and registered in the said area. 10. Additional 6[th] respondent has also filed an affidavit supporting the stand of the Government reiterating the requirement of the new society in the said area. 11. Heard learned counsel for the petitioner, learned counsel for the 5[th] respondent and learned Government Pleader. 12. The question to be considered in the present case is whether Ext.P6 order has been issued well within the powers under Section 101 of the Act and if there is any violation of principles of natural justice, mala fides or arbitrariness in the exercise of such power. W.P.C.No.1716/2011 7 13. The right of the Government to grant exemption from the provisions of Section 7(1)(c) of the Act is confirmed by the Division Bench of this Court in **Feroke Service Co-op.Bank Ltd. v. State of Kerala** [1995(2)KLT 404] wherein this Court had held that wide power is given to the Government under this Section to relax the provisions of Section 7(1)(c) in overall public interest. But the power cannot be used by the Government in a whimsical or arbitrary manner. Therefore the only point to be considered is whether exercise of power in the present case is whimsical or arbitrary. 14. Going by Ext.P6 order, Government has taken into consideration the rights of the farmers residing in ward Nos.1 and 2 of Perinad Grama Panchayath who appears to have represented to the Director, Diary Development Department, who is also the Registrar of Diary Co-operative Societies that a new society is required to be formed in the area to cater to their needs. It is also noticed that the area of operation of the Petitioner's Society comprised of 15 wards including Ward Nos.1 and 2 of Perinad Grama Panchayath and that it is reported that the milk collection in the petitioner's society is at a distance of 5 W.P.C.No.1716/2011 8 Kms from the present collection point and as such farmers in Ward Nos.1 and 2 were finding it difficult to take their milk by proceeding to such a distance. It is also stated that the petitioner's society has failed to carry out the directions of the department to de-limit the area of operation to facilitate the convenience of the diary farmers in the said area. In the explanatory note which is highlighted by the learned Government Pleader, it is again reiterated that the diary farmers residing in ward Nos.1 and 2 in Perinad Village, Kollam District are facing problem to market the milk produced by them since the present society in which these wards are presently included is nearly 5 Kms away, causing hardships to the women and children who travels long distance to deliver milk both in the morning and evening. 15. It is argued by the learned counsel for the petitioner that no materials are produced to invoke Section 101 of the Act and the reasons stated in Ext.P6 are only created for the purpose of passing Ext.P6 order. This argument, I do not think, is justifiable especially in view of the fact that Annexure R4(b) produced along with I.A.No.19815/2011 would show that W.P.C.No.1716/2011 9 proposal had been made by the Diary Development Department itself to the Diary Development Officer to form a new Society for ward Nos.1 and 2. Still further, public notice is seen issued as Annexure R4(c) and thereafter it is after a meeting of the farmers involved in the matter, that a decision had been taken. It could be seen that it is not a unilateral action of the Government in granting exemption whereas it has been done in public interest. 16. Then the next question is whether petitioners are required to be heard in the matter. It is evident from Ext.P6 that there was an attempt on the part of the Government to delimit the area of operation of the petitioner society. It cannot therefore be said that the petitioners were not aware of the factual circumstances involved in the formation of the new society especially in view of the fact that public notice has been issued in the locality and opportunities were granted to the persons in the locality to participate in the discussion. Therefore the petitioners cannot contend that they were ignorant of the fact that the Government had permitted de-limiting ward Nos.1 and 2 and to form a new society in the said area. W.P.C.No.1716/2011 10 17. The point is whether before the Government passing Ext.P6 order, whether an opportunity ought to have been granted to the petitioner for being heard. No doubt, there is no provision under Section 101 of the Act requiring the Government to issue notice to any of the persons involved in order to grant exemption under Section 7(1)(c) of the Act. But the point involved is whether such an opportunity should be granted despite the fact that there is an attempt on the part of the Government to delimit the area of operation of the said society. When the Government is exercising its statutory power with reference to power of exemption under Section 7(1)(c) of the Act and if there is no arbitrariness or illegality in the matter especially when the power is exercised in public interest, a right of hearing is not mandatory and will only be an empty formality. In that view of the matter, even if the petitioner is not heard before delimiting their area of operation and permitting another society to be formed, I do not think that there is any reason to interfere with Ext.P6 order. 18. The allegation of mala fides are not specifically pleaded and no materials are produced to show that there is any W.P.C.No.1716/2011 11 mala fides. The factual circumstances involved in the case would only disclose that it is on account of the convenience of the farmers who are in ward Nos.1 and 2 of the said area that the new society is permitted to be registered. In that view of the matter, I do not think that any interference is called for with reference to Ext.P6 order. 19. Learned counsel for the petitioner however points out that in the judgment of the Division Bench of this Court in **Karassery Service Co-operative Bank v. Mokkom Service Co-operative Bank** [2007(1)KLT 555] it has been held that even if an administrative office is put up in an area in which another society is registered, the business in respect of the area of operation of one society should not overlap the other society. The facts and circumstances in the above case will not have any application to the present case where the Government had exempted the society to be registered by invoking Section 101 of the Act from the provisions of Section 7(1)(c) in respect of the two wards. That apart, it is also seen that the petitioner had approached this Court without clearly disclosing the fact that the Society was permitted to be formed especially when a gazette W.P.C.No.1716/2011 12 notification had been published on 29/4/2010. It could be stated that they were not aware of such a notification, but still further Annexure R4(c) dated 16/11/2010 would show that there is a public notice issued in the locality. Therefore it cannot be said that the petitioner society was not aware of the Government order as such. 20. Hence the writ petition filed without disclosing the real facts and circumstances involved in the matter deserves to be rejected on that ground also. In that view of the matter, there being no merits in the above writ petition, the same is dismissed. (sd/-) ## **(A.M.SHAFFIQUE, JUDGE)** jsr W.P.C.No.1716/2011 13 W.P.C.No.1716/2011 14