The V.L. Spl. 200 Arakonam Primiry Agricultural Co-operative. Bank vs The Registrar of Co-operative Societies, The Joint Registrar of Co-operative. Societies, (Vellore Region) and The Management of the Arakonam Taluk Agricultural Growers' Co-operative. Marketing Society Ltd.

S.S. Subramani, J.—Petitioner is a Co-operative Society represented by its Secretary. This Writ Petition is filed by the Petitioner for issuance of writ of certiorari, calling for records relating to proceedings of 2nd Respondent Na. Ka.5689/96 Aa, dated 21.4.1997, quash the same, and pass such further or other orders as this Court may deem fit and proper in the circumstances of the case.

By the impugned Order, Four Fair Price shops were transferred from the jurisdiction of Petitioner, to third Respondent-Society. According to Petitioner, second Respondent has no jurisdiction to issue the order of transfer, transferring four shops without following the procedure established u/s 15 of the Tamil Nadu Co-operative Societies Act, 1983, with regard to transfer of assets and liabilities among registered Societies. It is said that the Act contemplates that the respective general bodies of the concerned registered societies should resolve to effect the transfer by passing a preliminary resolution which shall be sent to all the members and creditors, providing them an opportunity to intimate their intention to withdraw their share and interest in the capital and other moneys due to them in the Society. The resolution, even if passed, shall be subject to the approval of the Registrar of Co-operative Societies. Originally the Petitioner was having only six fair price shops. They were transferred to the third Respondent-Society in the year 1985. Subsequently, on 1.11.1993, 13 fair price shops were transferred from third Respondent-Society to Petitioner-Bank after duly following the procedure contemplated by law. However, re-transfer of four shops back to third Respondent-Society is being done without assigning adequate reasons and without following any of the procedures prescribed by law. When 13 shops were transferred to Petitioner-Bank by an order dated 1.11.1993, required resolutions from the general body were obtained and necessary approval from the Registrar of Co-operative Societies was also taken, and it was forwarded to the District Collector for formal transfer after following all necessary formalities contemplated u/s 15 of the Act. If the transfer is effected as ordered, the employees working in the shop will have to be transferred, or they will be thrown out of employment. Petitioner, therefore, seeks to quash the order.

I heard learned Additional Government Pleader also. The impugned Order is dated 21.4.1997, and the Writ Petition was filed only on 5.2.1998.

Only notice of motion was ordered by a learned Judge on 19.2.1998. There is no interim order till date. It is now more than 1-1/2 years since the impugned Order was passed. Even by the time the Writ Petition was filed, the impugned order had been implemented. When this was brought to the notice of learned Counsel for Petitioner, he only submitted that if the order is set aside, he will be entitled to get back those shops and the Writ Petition cannot be said to be infructuous. So, he wants an order on merits.

Learned Counsel for Petitioner only relies on Section 15 of the Co-operative Societies Act, which deals with transfer of assets and liabilities among registered societies. I do not think that this provision will have any application regarding dealership of Essential Commodities. It is the dealership that is entrusted to a Society under the Essential Commodities Act. Even though the Society purchases the goods, the purchase is with a condition that the commodities have to be distributed to the various Cardholders, and that they shall not be sold to any other person. Even the Society cannot make use of the same. If the Essential Commodities are not consumed or purchased by Cardholders, they have to be accounted and returned to the Rationing Authorities. Regarding Essential Commodities, law is entirely different. They cannot be dealt with as property belonging to the Society Fair Price Shops are only Trustees for the Cardholders, and they are bound to distribute the commodities only to them. The commodities are not liable to be attached and sold, and a Society or a dealer is not entitled to make use of the same as if they are the absolute owners. Section 15 of the Co-operative Societies Act will apply only to cases where the commodities belong absolutely to the Society, over which the Society has a saleable interest. In such cases, if a transfer of its assets is to be effected, resolution will have to be passed by the Society and procedure contemplated u/s 15 of the Act will have to be complied with. In regard to Essential Commodities, the only mode of transfer is to sell the commodities to the Cardholders or return them to the Rationing Authorities.

In this case, a reading of the impugned order makes it clear that the third Respondent-Society was in financial difficulties for a period, and taking into consideration that difficulty, the Rationing Authorities entrusted that right of the third Respondent in favour of Petitioner. When financial position of third Respondent improved, and was in a position to deal with the ration articles, naturally the entrustment which the Authorities made with the Petitioner became unnecessary and they wanted the same to be returned to third Respondent-Society. It is also seen from the impugned order that the third Respondent-Society is in a position to enter into transactions worth more than Rs. 3 lakhs and, therefore, it is necessary that Four Fair Price Shops which were temporarily entrusted with the Petitioner, should be returned back to third Respondent-Society. The Authorities have only returned what originally belonged to third Respondent.

In similar cases, I had occasion to consider about the right of a Co-operative Society in regard to Essential Commodities. The same is reported in 1998 Writ L.R. 38 (O. 1942 Sivanthipuram Primary Agrl. Co-op. Bank, etc. and 2 Ors. v. District Collector, Tirunelveli and 2 Ors.). The facts in that case were also similar where a temporary entrustment of a Society with some other Society was subsequently retransferred to the original Society. The same was questioned before this Court on the ground that the same violates the Principles of Natural Justice. I rejected the contention on the ground that Principle of Natural Justice has no application in such cases, for, there are no adverse civil consequences.

The Revenue Authorities are the best persons to say as to in what way and by whom Essential Commodities will have to be distributed. A dealer has no fundamental right to claim that he alone shall be the dealer for a particular area and no other person is entitled to compete with that business. Under the Public Distribution System, Essential Commodities will have to be distributed to the general public, and the general public must have easy access to various shops. It is the public interest that is being considered by Revenue Authorities and not the individual profit which a dealer may obtain. That is irrelevant so far as the Public Distribution System is concerned. A dealer cannot dictate to the Government or Rationing Authorities that the number of Cardholders should not be reduced at any point of time. Merely because an entrustment was made to another Society, taking into consideration the financial difficulties of a particular Society, the Authorities are not barred from returning back the dealership to the earlier dealer when his financial position has improved. Why the Authorities insist on financial position is, that the consumer public should not suffer, and it is not preference of another dealer in one''s place.

In this case, when third Respondent, the original dealer was in financial difficulties, the dealership was entrusted to Petitioner for a temporary period. Petitioner also knows that it is only an entrustment in the place of third Respondent, and the dealership is liable to be returned when circumstances change. The Authorities are now satisfied that the financial position of third Respondent has improved and that it will be in a position to distribute the Essential Commodities to the public without any difficulty.

In 1998 Writ L.R. 38 (supra), I have held thus:

It is not a case where the dealership was cancelled and the Petitioners were appointed as dealers. It is only a temporary arrangement. If that be the case, asking them to return that right is nothing but an administrative action for which there are no civil consequences. The question of legitimate expectation also cannot arise, for, the Petitioners very well know that their right to continue is only provisional, i.e., till the atmosphere of the third Respondent-Stores improves. One more circumstance which goes against the Petitioner is that the Respondents 1 to 3 provisionally entrusted the business of third Respondent to the Petitioners. Being an entrustment, naturally the Petitioners are bound to return when the Authorities who entrusted the same recalled it. The question of hearing will never arise in such cases.

The same legal position applies to the facts of this case also. I do not find any ground to interfere under Article 226 of the Constitution of India, and consequently the Writ Petition is dismissed. No costs. Connected W.M. Ps. are also dismissed.