LexAP. DAIRY DEVELOPMENT CORPORATION FEDERATION versus B. NARASIMHA REDDY & ORS.
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[2011] 14 (ADDL.) S.C.R. 1 AP. DAIRY DEVELOPMENT CORPORATION FEDERATION v. B. NARASIMHA REDDY & ORS. (Civil Appeal No. 2188 of 2008) SEPTEMBER 2, 2011 [P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.] . Co-operative Societies: A B c Andhra Pradesh Mutually Aided Co-operative Societies (Amendment) Act, 2006 - 2006 Amendment Act excluding the milk dairy co-operative societies from the societies covered by the 1995 Act and importing the fiction that such qairies would be deemed to have been registered under the 0 1964 Act- Constitutional validity of the 2006 Amendment Act - Held: By the Amendment Act, the extensive control of co· operative societies by the Registrar under the Act 1964 became incompatible and inconsistent with the co-operative principles which mandate ensuring democratic member E control and autonomy and independence in the manner of functioning of the co-operatives - It obstructed and frustrated. the object of the development and growth of vibrant co· operative societies in the State - Restrictions so imposed by the 2006 Amendment Act, with retrospective effect, extending over a decade and importinQ the fiction that all the dairy/milk F co-operative societies shall be deemed to have been excluded from the provisions of the 1995 Act and the societies would be deemed to have been registered under the 1964 Act, without giving any option to such societies suggest the violation of Article 19(1)(c) and are not saved by clause (4) G of Article 19 - It is arbitrary and violative of Article 14 - Reverting back to the co-operative societies under the Act . 1964 is a retrograding process by which the government would 1 H ' i 2 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. A enhance its control of these societies registered under the Act 1995 - They would be deprived not only of benefits under the said Act, but rights accrued under the Act 1995 would a/so be taken away with retrospective effect - Thus, the order passed by the High Court that 2006 Amendment Act is B unconstitutional, is upheld - Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 - Andhra Pradesh Co- operative Societies Act, 1964. Constitution of India, 1950: C Article 14 - Class legislation - Permissibility of - Held: D Article 14 forbids class legislation - However, it does not forbid reasonable classification for the purpose of legislation - Thus, class legislation is permitted in law provided the classification is founded on an intelligible differentia. Article 14 - Violation of - Held: Article 14 strikes at arbitrariness because an action that is arbitrary, must necessarily involve negation of equality - Doctrine of arbitrariness is not restricted only to executive actions, but E a/so applies to legislature - There must be a case of substantive unreasonableness in the statute itself for declaring the act ultra vires of Article 14. Article 19(1)(c) - Right to form associations or unions under - Scope of $tatutory intervention - Held: Formation of F the unions under Article 19(1)(c) is a voluntary act - Thus, unwarranted/impermissible statutory intervention is not desired - By statutory interventions, the State is not permitted to change the fundamental character of the association or alter the composition of the society itself - Encroachment upon G associational freedom cannot be justified on the basis of any interest of the Government - However, when the association gets registered under the Co-operative Societies Act, it is governed by the provisions of the Act and rules framed thereunder - In case the association has an option/choice to H AP. DAIRY DEVELOPMENT CORPORATION FEDERATION v. 3 B. NARASIMHA REDDY get registered under a particular statute, if there are more than A one statutes operating in the field, the State cannot force the society to. get itself registered under a statute for which the society has not applied - Co-operative societies. Administrative law - Doctrine of estoppel - Applicability 8 of, to policy decision - ·Held: State, being a continuing body can be stopped from changing its stand in a given case, but where after holding enquiry it came to the conclusion that action was not in conformity with law, the doctrine of estoppel would not apply - Thus, unless the act done by the previous Government is found to be contrary to the statutory provisions, C unreasonable or against policy, the State should not change its stand merely be
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