SANJEEVI TILES AND BRICK WORKERS INDUSTRIAL COOPERATIVE SOCIETY LTD Vs. EXECUTIVE DIRECTOR EAST GODAVARI DISTRICT SCHEDULED CASTES COOP SOCIETY LTD

JUDGEMENT

(1.) The question that arises for consideration of this Court in these two writ petitions is whether the District Collector, East Godavari is empowered to constitute a Committee for leasing out the petitioner society, which was registered under the provisions of the A.P. Co-operative Societies Act and a member of District Scheduled Castes Cooperative Society Limited for a period of three years.

(2.) The facts leading to the filing of these writ petitions are that the petitioner society came into existence in the year 1975 and is a member in the District Scheduled Castes Co-operative Society, Kakinada, by taking a term loan and availing other facilities that are available to the members of the District Scheduled Castes Co-operative Society. After some time the members of the Society were not able to run the Society on profitable lines and with the permission of the General Manager, District Industries Centre, Kakinada i.e., the second respondent, they have given the factory on lease for a period of three years in 1992. Before the expiry of the lease period, the President and Secretary of the Petitioner Society once again approached the second respondent seeking permission to lease out the factory for three more years. But, the request of the Society was turned down by the second respondent in his Lr.No.3387/C/92, dated 14-09-1995. In the mean time, now from the files it is seen that the office bearers of the petitioner society were making strenuous efforts for grant of further loan through their representations to the District Collector, who is also a Special Officer of the District Scheduled Castes Co-operative Society Limited. In those circumstances, the District Collector in his capacity as Special Officer of the East Godavari Scheduled Castes Co-operative Society Limited in R.C.No.S6/12/85, dated 12-10-1995 constituted a Committee with the first respondent as Chairman, the second respondent the Assistant Commissioner of Labour, Rajahmundry and the President of the petitioner Society as members of the Committee to take a decision with regard to the issue relating to the lease of the petitioner mill. The members of the Committee were directed to meet at 10-00 a.m. on 16-10-1995. Pursuant to these proceedings, the Committee met at the stipulated time and day and unanimously resolved to call for sealed tenders for leasing out the unit for a period of three years. Under this resolution the petitioner Mr. Veera Raju, who filed Writ Petition No.25062/95 on behalf of the Society was a party to the proceedings and he did not raise any objection for calling the tenders. After he left the meeting, perhaps because of the pressures brought on the members of the Society by the previous lessee, a general body meeting of the petitioner Society was held on 20-10-1995 and resolved to lease out the factory in favour of the previous lessee i.e., Mr. M. Bhadra Rao, who is no other than the petitioner in the 2nd writ petition for an amount of Rs. 1.30 thousand per year for a period of three years. On the same day they entered into lease agreement with Mr. Bhadra Rao. Thereafter they made representations to the Respondents No. 1 and 2 not to call for tenders to lease out the factory as the petitioner Society has already taken a decision to lease out the same to M. Bhadra Rao. In the mean time, a tender notice issued by the 1st Respondent, dated 25-10-1995 appeared in the daily newspaper 'Andhra Jyoti' on 31-10-1995 wherein sealed tenders were invited to take the factory on lease for a period of three years. Having received the representations of the petitioner society 1 st Respondent issued a show-cause notice on 31-10-1995 to the Society to submit its explanation why the lease agreement entered into by them in favour of Sri Bhadra Rao should not be cancelled. Questioning the show-cause notice while the petitioner society preferred Writ Petition No.25682/95, Mr. Bhadra Rao preferred the 2nd Writ Petition.

(3.) The main contention raised by the petitioners in both the writ petitions is that as per the bye-laws of the society as approved by the General Manager, District Industries Centre who is the functional Registrar for these Societies in his endorsement No.3382/ C/92, dated 11-10-1993, the power to lease out the industry to outsiders rests with the General Body but, not to an outsider. In support of their contention they relied on bye-law 3Q: