JAKFED Vs. U O I

JUDGEMENT

(1.) The Let ters Patent Appeal in hand is directed against the judgment dated 20th May, 2011 in OWP No. 485/2007 titled "JAKFED and others v. Union of India and others", whereby, the appellants' writ petition has been dismissed. First, an overview of background facts:

(2.) The appellant No.1 is a society duly registered under Jammu and Kashmir Societies Registration Act, 1998 (1941 A. D.) The appellant society sometime back became share holder of Krishak Bharti Co-operative Ltd. (KRIBHCO for short) and took upon itself the responsibility to supply fertilizers and other products, marketed by KRIBHCO-respondent No. 2 herein, to the member societies of appellant No. 1 in the State of Jammu and Kashmir. The appellant No.1 as per the arrangement arrived at, would pick up the supplied fertilizers from Railway Station, Jammu and transport and deliver it to its member societies at block level, where from it would go to the farmers. The appellant No. 1, in the process, incurred huge expenditure on account of transportation of the supplied fertilizers from Railway Station, Jammu to its member societies. The matter was taken up with the Government of India for reimbursement of the extra cost incurred on account of transportation and the Government of India vide order dated 16th October, 1997 laid down a scheme styled as "Special Fright Reimbursement Scheme" (SFRS) operational with effect from 1-4-1997. The appellant society, however, continued to insist on giving retrospective effect to the Scheme. The financial crisis with which the appellant society was confronted did not come to an end with the "Special Freight Reimbursement Scheme". The member socieites of the appellant society, defaulted in making payments due from them, resulting in arbitral proceedings initiated by the appellant society. The arbitral proceedings resulted in two awards in favour of the appellant society. One against Vijay Co-operative Society and other against Jammu Tehsil Co-operative Society.

(3.) However, the respondent No.2 on its part, aggrieved with non-receipt of the amount due to it from the appellant society raised a dispute in terms of Section 74 (2) (a) of "The Multi-State Co-operative Societies Act, 1984" ("MSCS, Act 1984" for short) before Central Registrar, claiming an amount of Rs. 7,44,67,100.40/- (rupees seven crores forty lakhs sixty seven thousand one hundered and forty paisa) due to the KRIBHCO - respondent No. 2 till 30th September, 1995. Though the appellant society contested the claim, the proceedings led to decision styled as "Judgment" in terms of Section 76 of the MSCS Act, 1984 by the Central Registrar on 17th August, 1999. The judgment/decision made the appellant society liable to pay an amount of Rs. 2.91/-crores to the respondent No. 2. The interest accruing on the admitted outstandings of Rs. 2.91/- crores was, however, directed to be waived in view of the financial difficulties in which the appellant society had landed. Appellant society was asked to make concerted efforts to obtain finances either from its Marketing Societies or from State Governments and give an undertaking that in the event, such money is obtained from the Marketing Societies, the admitted outstandings of Rs. 2.91/- crores would be the first charge on the amount.