GUJARAT HC HELD GUJARAT COOPERATIVE SOCIETIES (AMENDMENT) ACT, 2019, AS UNCONSTITUTIONAL AND NOT IN PUBLIC INTEREST

The Gujarat High Court held that the Gujarat Cooperative Societies (Amendment) Act, 2019, is unconstitutional, prejudiced, absurd, arbitrary and not in the public interest. This amendment eliminated 13 sugar factories from the list of specified cooperative societies in Section 74C (1)(v). As per the Act, the state is no longer required to hold the election. Rather the amendment stipulated that the factories themselves would conduct the election. 

A large number of Writ petitions were filed against the exclusion of sugar factories from the list as the election may be held as per the whims and caprice of the concerned cooperative societies. 

The State submitted that the aim was to reduce expenses and burden on the administration. Over the years, government stakes have been reduced to nil, and thus there no longer existed a public interest. Moreover, the sugar factories were removed from the list as they are no "federal cooperative societies".

Dismissing the argument, the bench of Chief Justice Vikram Nath and Justice JB Pardiwala said that "What is the purpose achieved by the state by this amendment? Should the Government save money and burden at the cost of a free and fair election? Saving of money or the administration burden is nowhere near to Public interest or in any way reasonable." 

The Court further summarised the amendment while allowing the writs:

1. The Amendment fails to disclose its main object, and therefore it is discriminatory and also manifestly arbitrary;

2. The classification between federal cooperative societies and primary societies is absurd and unreasonable;

3. The Court may fail to look into the motive of the legislature, but can definitely look into the object of the legislation;

4. Chapter XI-A of the Act and the Rules, 1982, ensure free and fair election to its members.

Author: Papiha Ghoshal