Decided on July 08,1994

STATE OF ASSAM Respondents


- (1.)1. The Assam Co-operative Sugar Mill was registered as Co-Operative Society in the year 1955. In 1958 the Mill started operation. In 1979 the 6th Annual General meeting was held and there was a profits of Rs. 16 lacs and Bonus was given to the workers @ Rs.20%. Incentive bonus was also given to the sugar cane grower @ Rs. 2/- per quintal. This meeting approved the plan for modernisation and expansion of the mill. Later a loan of Rs. 15 lacs was secured from N.C.D.C. A new Board of Directors was elected far 3 years. In 1981 the Govt. superseded the Board of Directors in exercise of its power under the Assam Co-operative Societies Act for smooth functioning of the mill. Thereafter the mill continued to suffer loss and in 1992 the accumulated loss was Rs. 9 corers. It is alleged that during this period there was series of mismanagement of the mills and no balance sheet was prepared. On 10.11.92 there was an article in the newspaper "the Sentinel" to the effect that the mill is being handed over to a Bombay based industrialist i.e., Annexure 1 to the Writ application. On 14.11.92, there was a meeting of the: Shareholders, employees cultivators etc. and an action committee was formed. It is alleged that the mill owns substantial property and the Govt. kept control of the Society for over a decade in violation of the law. It is contended that the Government has no power to transfer the property, this attempt to transfer is an abuse of the authority and is violative of Article 300 A of the Constitution of India and the alleged transfer destructed the vested right of the society and contrary to the spirit of the Co-operative movement. Hence, this writ application under Article 226 of the Constitution of India with the following prayer : To issue direction commanding the respondents not to effectuate the proposed transfer aad to hand back the control and running of the affairs of the society to the duly elected Board of Directors of this Society.
(2.)An affidavit-in-opposition has been failed by the Under Secretary to the Government of Assam, Co-operative Department wherein it is stated that the present petitioner has no locus standi to file this proceeding. There was a demand from the all corners to run the mill by any means and to make necessary payment to the workers. It is also alleged that the State of Assam has more than 80% share of the Sugar Mill and if substantially advanced the loans to it for smooth and efficient functioning. The loss of the mill as on 31.3.92 stands at Rs. 6.35 crores. The loan of Rs. 15 lacs stated to be given by N.C.D.C. was not given to the mill directly. The loss of Rs. 6.35 crores spreads over the entire portion of the mill from 1958 to 1992. When the mill turned to be a sick one, the financer, Assam Co-operative Apex Bank decided to stop further financing of the mill and the Board of Directors in its meeting held on 22.10.92 decided to approach the Govt. to take whatever steps as deemed fit and proper ito run the mill in the interest of all concerned. The Government examined tine matter and constituted an expert committee to study the ways and means for functioning of the mill and the expert committee recommended to lease out the sick unit to a private party. It was at this stage that one Ramnord Research Lab. (P) Ltd. 77 Dr. A. Basant Road, Bombay came forward to take the lease of the Mill and accordingly a Memorandum of Understanding was drawn up to give the mill on lease. The ownership of the mill was never handed over to the private party but only the mill was allowed to be run by the private party. That Memorandum of Understanding is at Annexure-1 to the affidavit-in-opposition.
(3.)Subsequently, another affidavit was filed on 10.6.94 on behalf of the petitioner wherein it is admitted that this third party after taking over the sugar mill from the Government came to an agreement with its workers on 18th March, 1993, 3rd April, 1993, 6th July, 1993 and the 17th September, 1993 and these documents are annexed as Annexure No. 3, 4, 5 and 6 to the affidavit-in-opposition filed on 10.6.94. So, the admitted position is that the party mentioned has already taken the possession of the mill but that party has not been made a party in this writ application. On 8.1.93 this Court passed the following order :
"So far as interim prayer is concerned it is ordered and directed that if any transfer of Sugar Mill is made pending disposal of this writ petition, it shall be subject to the result of this writ petition."

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