The Gujarat High Court on Friday ruled that the Gujarat Cooperative Societies (Amendment) Act, 2019, which effectively took away the State's responsibilities when it came to conducting elections of cooperative sugar factories is unconstitutional, discriminatory, absurd, manifestly arbitrary and not in the public interest (Pravinsinh Indrasinh Mahida v. State of Gujarat).
By the said amendment, sugar factories had been deleted from the list of specified cooperative societies in Section 74C (1)(v) the Gujarat Cooperative Societies Act, 1961 (1961 Act). With such deletion, the State was no longer required to hold the elections in accordance with the provisions of the Gujarat Specified Cooperative Societies Elections to Committee Rules, 1982.
As such, the elections were to be conducted by the cooperative sugar factories itself and no independent government officer would be required to conduct the elections.
A large number of writ applications were moved before the High Court, registering protest over such exclusion of sugar factories from the list of cooperative societies in the 1961 Act. The writ applicants raised concern that, after the amendment, elections may be held as per the whims and caprice of the concerned cooperative societies.
The amendment was defended by the State and the Gujarat State Federation of Cooperative Sugar Factories Limited.
The State submitted that the aim was to reduce its expenses and administrative burdens. There were 13 sugar cooperative societies as on date in Gujarat which were taken out of a list of 343 specified cooperative societies. The State also added that over the years, the government's stake (in terms of share capital) has been reduced to nil. Therefore, the element of public interest is no longer present in sugar cooperative factories, it was asserted. Sugar cooperative factories were also sought to be set out as unique, in the sense that they were not federal cooperative societies.
A Gujarat High Court Bench of Chief Justice Vikram Nath and Justice JB Pardiwala, however, was not convinced.
At the outset, the Bench rejected the stance that Article 14 of the Constitution (right to equality) is irrelevant when it came to the present case since it was not a case of classification but rather one of de-classification.
The Court went on to hold that the challenged amendment was discriminatory given that (i) it did not disclose an object that was reasonable or in public interest and (ii) the differentiation sought to be made had no connection or nexus with the object sought to be achieved.
"The object and reason for the impugned legislation, as is evident from the stance of the respondents, is to save money and administrative exigency. It goes without saying that none of the two objects could be said to be in public interest or are reasonable. We are at one with all the learned counsel appearing for the writ applicants that the object of the legislation is not only petty, but the same is not in public interest nor reasonable," the Court said.
Addressing the contention that sugar cooperative societies can be treated differently since they are not federal, the Court further observed:
"The voters are now being told by the State that they would be left with what the society decides. Why because yours is not a federal society. Even at the relevant point of time, the Sugar societies were not federal. So, how would that be relevant for the purpose of exclusion? In other words, if the Sugar societies were included despite the fact of not being federal, then how is it relevant for the purpose of exclusion?"
The Court also went on to conclude that the amendment in question was manifestly arbitrary. The Court summarised its conclusions as follows ,First,the amendment is discriminatory as it fails to disclose the object which could be termed as reasonable or in public interest. The amendment is also manifestly arbitrary.Secondly, the differentiation pointed out by the State has no nexus with the object sought to be achieved. The classification in the present case between the federal and primary societies on the ground of administrative exigency and saving money could be termed as absurd, unreasonable and not in public interest. In view of the same, the classification itself has become irrelevant,Third,the Court may not look into the motive of the legislature, but, definitely, the object of the legislation can be looked into. Fourth,all the specified societies form one class / one homogeneous group for the purpose of its members to ensure free and fair elections under Chapter XI-A of the Act and the Rules, 1982.
Therefore, the writ applications were allowed.