Allowed

M.D., Apsddcf Ltd., Hyd v. M.D., Tsddcf Ltd., Hyd and 8 Ot

Telangana HC9 Mar 2021WP/22680/2016

Case brief

AI extract

What is this about?

Division of a Schedule IX dairy federation's assets required separate treatment of headquarters and operational units. The Court allowed the petition, set aside the unilateral transfer order, directed population-based division of headquarters assets and bank balances, and location-based division of operational units. It included the guest house, but not the milk factory, within headquarters.

What did the court decide?

Unilateral transfer order set aside; headquarters assets, guest-house value and bank balances ordered apportioned; operational units divided by location; bank operation restrained pending division.

M.D., Apsddcf Ltd., Hyd Vs M.D., Tsddcf Ltd., Hyd… — Cooperative Societies | Telangana HC (2021)

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

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TUESDAY ,THE NINTH DAY OF MARCH TVUO THOUSAND AND TWENTY ONE

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PRESENT

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THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND

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THE HONOURABLE SRI JUSTICE T.VINOD KUMAR

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WRIT PETITION NO: 22680 OF 2016

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Between:

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The Andhra Pradesh State Dairy Development Coop. Federation Ltd, Vijaya Bhavan, Lalapet, Hyderabad- 500 017, Represented by its Managing Director.

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...PETITIONER

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AND

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Telangana State Dairy Development Coop. Federation Ltd., Vijaya Bhavan, Lalapet, Hyderabad - 500 017, Rep. by its Managing Director.

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The State of Telangana, Animal Husbandry, Dairy, Development &^Fisheries (Dy.ll) Department; D Block, Secretariat Buildings, Hyderabad, Rep. by its Principal Secretary,

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The Union of lndia, Ministry of Home Affairs, Government^{of India, New Delhi,} Represented by its Secretary.

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The State Bank of Hyderabad, Lallaguda Branch, Opp.^{National lnstituteof} Nutrition, Lallaguda, Hyderabad, Represented by its Chief^Manager.

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The State Bank of lndia, Lallaguda Branch,^{12-5-3518,12, Manideep,} Lallaguda, Tarnaka, Secunderabad.^{Rep. by its Chief Manager}

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The Andhra Bank, Tarnaka Branch,^{12-13-1237, Moulali Raod, Tarnaka,} Secunderabad Represented by^its Chief^Manager.

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The Canara Bank, Tarnaka Branch,^{D.No.2-5-35lA,1st&2nd Floor, Lalapet} Main Road, Tarnaka, Secunderabad.^{Represented by its Chief Manager'}

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B. The ICICI Bank, Habsiguda Branch,^{AjayChambers, Uppal Road'Habsiguda,} Hyderabad Represented by its^{Branch Manager.}

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The Axis Bank, Tarnaka Branch,,^{D.No.12-5-'149117,Opp. Railway Degree} College, Tarnaka Branch, Hyderabad. Represented^{by its Branch Manager.}

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...RESPONDENTS

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Petition under Article 226 ol the Constitution of^{lndia praying that in the} circumstances stated in the affidavit^{filedtherewith, the High Court may be} pleased to issue a Writ, Order or Direction, more^particularly one in^{the natureof}

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Writ of Mandamus declaring the action of the 2nd respondent in issuing the G.O.Ms.No.B AH DD & Fisheries (Dy.ll) Department dt.6-52016 as iltegat, arbitrary and contrary to the Constitution of lndia and provisions of the Ap Reorgsanisation Act 2014 and by setting aside the same and consequenfly direct the lst respondent not to operate the bank accounts prior to 2-6-2014 unless and until the division of assets and liabilities are completed in terms of Sec.53 of the A.P. Reorganisation Act.

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WPMP. NO: 27889 OF 2016

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased suspend the operation of the G.O.Ms.No.B AH DD & Fisheries (Dy.ll) Department dt. 6-5-2016 issued by 1st respondent pending disposal of the writ petition

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Counsel for the Petitioner: THE ADVOCATE GENERAL (AP)

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Counsel for the Respondent No. 1: THE ADVOCATE GENERAL(TS) FOR

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SRI. PALLE SRIHARINATH, SC FOR TSDD

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Counsel for the Respondent No. 2: THE ADVOCATE GENERAL(TS)

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Counsel for the Respondent No. 3: SRl. NAMAVARAPU RAJESHWAR RAO, ASST. SOLICITOR GENERAL

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Counsel for the Respondent Nos. 4 to 9:

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The Court at the stage of admission made the following:

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T'IIE HONOUITABLE SRI JUSTICI] M.S.RAMACHANDRA RAO

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A\t)

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'il I I.t HO()t I RA I)t.I SllI .t l.rsl't(_-L't.vI NoD KUMAR

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Wril I'elition No.22680 of 2016

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ORDIiR: ll't,r I!on hla .\rt .lt*tit e .\l .5. I rtuuclnrrttlru Ruol

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'I'he Andhra Pradesh State Dairy Development Co-operative Federation I-td has tlled this Writ Petition against the Telangana State Daily Dcvelopment Co-operatjve Federation t.td., (1" respondent), the State ol 1-elangana (2nd respondent), the Union of India, represented by its Secretary, Minisrry of Home Affairs, New Delhi (3'd rcspondent) and six Banks (respondent No.s 4 to 9) to declare the acliorl ol' the Statc ot'^'Iclangana in issuinq G.O.Ms.No.8 Animal I lusbandry, Dairy I)ev.rlopment and Fisheries (Dy-lI) Department, dt.0(i.05 2Cl6 as illegal. arbitrarv, conrrary ro the Constitution of India arrd thr- provisions o1- rhc A.P. Re-organization Act,20l4 (for short, 'the Act'), to set aside the same; and to consequently direct Telangana State Dairy I)eveloprnent Co-operative Federation Ltd., not to operate Bank Accounts in respondent nos.5 to 9 Banks prior to 02.06.2014 unless and until division of Assets and Liabilities is completed in tenns of Section 53 ofthe Act.

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'l he background facts

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'fhe cornposite State ol Andhra Pradesh was bifurcated into the ncrv State ol"l elangaua and tlrc rcsicluary State o1' Andhra Pradesh w.c.1. 02.06.20121 undcr rhe Acr madc bv the Parliament.

¶41

In the composite State o1' Anclltra Prr'tdcsh. assistanco ol^the LTNICEF was taken in 1960 to comnence^{lntegrated MilkProjcct} focusing on organizing rnilk production as a sttbsidialv^activityto augment the income o1' farmers. to arrangc firr collcction o{'rul'al surplus milk at the door steps ol the f'armers ancl to^{providequality} milk to the urban and semi-urban consuffrers.

¶42

Initially, dairy development activities u'ere coordinatcd by the Dairy Development Department of the State Government and vast dairy infrastructure was built throughout thc composite State of Andhra Pradesh.

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'fhereafter, inl973, these activities were translerred to a Corporation by name, A.P. Dairy I)evclopnrcnt Corporat.ion l,td.. a company registered under the Companir:; Act. 19.56 v iclc G.O.Ms.No.842 (F & A) (Dair1,) Departrnent dt. 14.08.1973. .1r.ll tl'rc shares in the said Corporation rvere owned by the Government of Andhra Pradesh.

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In 1980, a policy-decision was taken by tlre Govelnment of' Andhra Pradesh vide G.O.Ms.No.SSl, Ir & RD d1.10.12.1980 to implement Operation Flood Scherres f'r-rndcd through^''lndian Dairy Corporation" under^'Ihree-Tier cooperative stnrcture whereunder : (i) at village level, Primarv Co-operative Socicties collect milk. (ii) at District level, Dairy lJnits process, packagc ancl nr:rrket as per thc directives of the Federation at State level; ancl (iii) at the State level. the petitioner would market rrilk and rnilk ploducts under thc popLrlar 'Vijaya'brand.

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For the above operations, the A.P. Dairy Development Cooperative l.'ederation carne into existence on L 10. 198 I on being registered under the A.P. Co-operative Societies Act, 1964, and the A.P. Dairy Developrncnt Corporation (the Company) gave all its assc'ts to the petitioner on rent ol Rs. 1,000/- per annum for operational r-nanagement including the manpower.

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l'hus tl.rere wcrc two entities- (i) A.P. Dairy Development Cooperative Fcde|ation l.td ( a Society') and the (ii) A.P. Dairy Devcloprrent Corporation Ltd.( a Cornpany).

¶48

fhe r.P. I)airy l)eveloprnenl Co-operative Federation, prior to bilirrcation o1'the corrposite State ol Andhra Pradesh on 02.06.2014, was operating in the Districts of Anantapur, Kadapa, Chittoor, West Godavari. Ilast Godavari and irr I(rishna through its member Krishnavcni Milk t.lnion, Warangal, Khammam, Mahbubnagar, Nalgonda. Ranga Rcddy, Medak, Nizamabad, Karimnagar and Aclilabad and also in I ll,cierabad.

¶49

Alier' 02.06.2014, the^'felangana State created its own -l clrngana StaLc I)airy [)cvclopmc.nt Coopelative Federation ( l" r-cspondcrrt) r iclc R.C.No.l08 ,' l0 I6 l:edcn., dt.04.03.2016.

¶50

I I. l'herealter the A.P. Dairy Developrnent Co-operative Ircdcration's activit;cs bccarre conllned to the residuar"y State ol Arrdlrra Pradcsh.^'l'he suiti enrirl, is the petitioner in this l4trit Petition.

¶51

'--l].. ln the Act u,hich was enacted on 01.03.2014 and which came into e lJcct ll'orn 02.06.1014. the erstr.vhile A.P Dairy Development

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co-operative Federation Ltd along with the A.p. Dairy Development corporation of the composite State of Andhra pradesh were both listed at Serial Nos.73 and 70 o1' IX Schedure arong with other Govemment Companies and Corporations.

¶54

'l hc con tcn ti ons of petition cr

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According to petitioner, there was a Cerrtral Dair,v ar Hyderabad (which was a part of the A.p Dairv Developmcnt Co-operative Federation l,tc1) r.i,hich was a N{ill< Irroclucts l;aclorr with modern facilities ror processing and packaging or rnilk and ,rirk products to cater to the needs of consumers duly processing milk received from the Districts of the undivided Andhra pradesh Statc. and it was carrying on business in the name and style of the petitior.rer under the popular :Vrjaya' brand even after 02.06.2014.

¶56

Petitioner conte,ds that as the divisiorr rr',{sse1s and r.iabiritics of IX Schedule entities is required to be done as pcr Section 53 o1, the Act; that after 02.06.20 i4, the State of Andl.rra pradesh sought clarification from Union of lndia rhrough D.O. leuer No.20757 / CAI) / SR / 2014 dr.02.12.2014 with regard to the division / distribution ot. assets and liabilities between the two States, and that the Union of India has not given any clarification on the issuc. and the issue is still pending with the latter.

¶57

I5' Petitioner contends that while so, the state of T'elangana issued the impugned C.O.Ms.No.8 Animal Husbandry, Dairy Development and Fisheries (Dy-lI) I)epartraent, dt.06.0,s.2016, conravening the

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provisions of the Act and transferring the Milk Products Factory at l,alapet, tlydsyq6rT, other Dairy buildings and Somajiguda Guest House, at Hyderabad belonging to the erstwhile A.P Dairy Development Co-operative Federation Ltd to the Telangana State Dcrirv Development Co-olterative Federation ( l'' respondent).

¶61

Petitioner contends that these properties pertain to the 'lleadquarters' of the erstwhile A.P. Dairy Development Co-operative Ircdcralion Ltd.; clarillcation w ith rcgard to what are the properties ol thc 'i Ieadquarters' was pending with the Union of India; and without the consent of the petitioner, the State of Telangana acted unilaterally tran.s1i'rling thc saicl t)t opcrtics to the l'' respondent, lt is also contended that this is contrary to the Dispute Resolution Sub(lonrrnittee Meetinss held on 30.05.2015 and 01.04.2016 corrrrrrunicated r.idc lcttcl No.il0I2' 12 2014^-SR, Govemment of India, Minislrv ol' Honte Al1-airs (CS Division) dt.09.07.2015 and 25.04.20)6, and that the said G.O. should be struck down as violative o1' Article 14, the Act, as well as ccrlain clauses of the Joint General Ilody rreeting Minutcs. which meeting r.vas held on 18.12.2015.

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Petitioner contends that the Joint General Body of the A.P Dair."- I)evelopurent^{('o-opclativc} Fc'delation consists ol the ( lrlrnnarr (Principal Sccretarics) and Senior Officials ol both States; and in thc meeting held on 18.05.201 5. a Resolution was signed by Principal Secretaries oi'both Statcs o1- Andhra Pradcsh and Telangana as u nder' :

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"(, A datry development Jbderation has to be registered Jbr Telangana Stata.

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(i0 Head Office sunctione d posts hat,e to he dit:itlad a.s per rution (58:42) Srate level employee.s to be divided by giving ona week notice (this is Jor other thun lt(ilk f,roducts Fuc,tor1,)

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(iii) Head Office space b be divided h), tylo ,.tates us per 58;12 ration to fdcilitate independent operulion by eoch./ederution.

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(iv) The Assets and Liabilities regarding MpF, Hyderabatl. Somajiguda Guest House, a decision u,ill be taken alier clariJication from the Got,ernment of lndio. "

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Petitioner contends that unless and until a clarification is received from the Govemment of India it was not open to the State of Telangana to issue the impugned G.O.

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Reference is also made to a Circular No.399 / Gencral / Aclnn. V I 2012 dt.12.02.2016, and it is conrended that the opcrarior.ral guidelines lor srnooth cotlduct of da1,-to-dav opcrations rverc.iointlr approved and administrative orders were comt-nunicatecl by this proceeding.

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Petitioner also contended that thc ersrwhile A.p. Dairy Development co-operative Federation had opened accounts before 2014 in respondent nos.4 to 9 Banks, that these accounts were in the name of the Managing l)irector ol the said l;cderation; and by virtue of the impugned G.O. issued by the State of^.felangana, the 1,1 respondent was making attempts to transfer the accounts ancr also open new accounts in the name of the Managir-rg Dircctor. o1' thc Telangana State Dairy Development Cooperative Federation i I,, respondent). Petitioner contends that without apportionment of assets

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under Section 53 o1'the Act. the accounts cannot be transferred in the nanrc of the Managing Director of the Telangana State Dairy Development Cooperativc [-'ederation ( l" respondent).

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2l , Petitioner contends t.hat correspotrdence took place between the Government of A.P. and the Govemment of^'Ielangana for deletion of lhc Milk Prcducts liactolr', IJrvdcrabad and othcr Dairy l]uildings and the Somajiguda^(luest llouse, being part of 'Headquarters' of ersrw hile A.P Dairy l)evelopment Co-operative Federation Ltd from G.O.Ms.No.8, but the State ol Telangana did not heed this concerns. Petitioner also contends that the Chief Secretary to the Government of Andhra Pradesh wrote a letter dt. 14.06.2016 to the Secretary, Ministry o1' Home AIl)irs, Govcrnrrent o1- India by bringing to his notice the issuance o1' C.O.Ms.No.8 dt.06.05.20t6 by the State of Telangana pending de-merger and division of assets and liabilities between the t\o successor States, ancl that response tiom the Union of India is au u itccl.

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(i.{).\ls.\o.17 dt.16.07.2016 issued bv thc State of Telansana after filine of thc \ rit Petition

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Atic'r the liling o1'this Writ I)etition on 06.07.2016, the State o1' 'l'elangana issued G.O.Ms.No.17 Animal Husbandry, Dairy Dcvulopmcnt and [risherics (DY-ll) Deparlnrent dt.l6.07.2016.

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in this G.O., aftcr extracting plovisr-r to Section 53(1) of the

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,\ct and Section 68, it is stated as under' :

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'' llthcre as, O//ice .s1tut't tt haadquorte r Ltl .4.P. Duirlt Developmenl

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( o-operLltive |,'etleration i.intitcd. I lytlerubad has been divided

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between two States 1n,o .floors to Andhra Prudcsh ond hro ./ltxtr.r to Telangana State) as on interim arrangeme-ll! for lhe convenient functioning^{of offices o.f boththe States.}

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Whereas, Telangana Slate hus creoted it.\ ou'n^'l'elanguna State Dairy Development L'ooperatiNe b'ederotion vitlc R.('.No.208,' 2016 Feden., dt.04.03.2016 as per the decision taken in the Joint Generttl Body Meeting of the .4.P. [)airy Development^('ooperotive Fetlerution Limited held on 18.12.201 5.

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Hence,^pending appefuouqgJ1! d_q,Vlt,tLt44 ItqbiUay,t fi Ll). I)airt, Development Cooperative Federotion Lintitctl, I l1;dertbud and A.l'. Dairy Development Corporolion Hytlerubad and in term.s cJ Section 53 read with Section 68 of the A.P. Rcorguti:ation At't. 2011, g;.an Sdrnlry;tSlry9.-_UfSlge.ly(^nl! ./br^prope r fu^{nt t i on i tt g} o/^{t.,pc ruti on u} l units of A.P. Dairy L)evelopmant^('oop(rutitt l,edcrution l.intitul. Hyderabad which are located in the State of'[alungunu including htilk Product Factory at Hyderabad and Guest House at Somttjigudu, Hyderabad u'ill function uncler the udministrativc contrul ol Telangana Statc Dairy Devektpment^{('rtoperutit,c} l;ederqt ion l,imitcr.l. Hyderabad.

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Accordingly, the G.0.Ms.No.08 dt.06.05.2016 is clari/iad.' (emphasis supplied)

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Thus, the above Government Oldcr sugg,estcd lha-t vide G.O.ms.No.l7 dt.16.7.2016, the earlier G.O.Ms.No.8 dr.06.05.2016 issued by the State of Telangana transferring the operational units of erstwhile A.P. Dairy f)cveloprrent CJooperative l:cderation Lirnitcd, I-Iyderabad which are located in the State of^'l'elangana including Milk Product Factory at Hyderabad and Guest Flouse at Somajigucla, I{yderabad to the ['' respondcnt is on!] a ttotlsilot'.t, ot'rLulgetnent. pending apportionmenl ol assets and liabilitics ol thc erstwhile A.P. Dairy Development Cooperative Federation Ltd., Llyderabad and the A.P. Dairy Development Corporation, llyde;rahad in terms of Secticxt 53 and 68 of the Act.

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'[he communication dt.26.08.2016 from thc (iovcrnmgnt of India

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It appears that the Government of India issued a communication on 26.08.2016 inlbrming both Chief Secretaries of both States that in the Minutes of the rneeting ol the Dispute Resolution Committee held on 20.07.2016, it was emphasized that both States should maintain stotus quo and not resoft to any unilateral action till the bifurcation of assets and liabilities along',vith ernployees is flnalized as per the Act. In rhc said communication. it r.r,as f urther stated that the word 'status rTrro' used in the Minutes ol the said meeting held on 20.07.2016 )lleantthe position as on 01.06.2014 i.e., before the date of bifurcation ar-rd botl-r the States r.vere lequested to rxaintain their earlier position as i1 u,as or.r 0l .06.:014.

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26.^'I'aking note of this. a l)ivision l]ench of this Couft on 06.09.2016 askccl thc rcsponsc of'the State ol'['clangana.

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'Ihe l'r cou nter-affidavit of thc I " resDondent filcd on 6.9.2016

¶91

27.^{'lhc-l-elangana} State Dairy Development Cooperative I:cd,.'ration I.td. (I" rcspondcnt) filcd a countcr'-affidavit dt.06.09.20 I6 clrclosin-e copy ol the above G.O.Ms.No.l7 dt.16.07.2016 where it u'as stated that arlangcmcnt:rade in G.O.Ms.No.S dt.6.5.2016 was an ' i rrlcri rn arrangcntcnt'

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lt also statcd that corrr.non Bank Accounts of the two States u,erc stopped as pcr thc lettos given to respondent nos.4 to 9 by the Managing l)ircctor ol' thc A.P. I)arry [)cvelopment Cooperative [;ec]clation (petitioner)

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wp rlo6u lu ro

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It is further stated that the Ministrv ol Homc Aflairs had held a meeting on 30.05.2015 with the Ministry ol l-aw and.lustice. Government of India, regarding the delinition ol' the tenlr 'lleadquafter' occurring in Scction 53 ol the Act; and thc Minutes of the said meeting indicate that thc said Ministrl had agrced that 'Headquarters' would include v,here tlte ChieJ' Executive Of.fic'er .' Chairman /Directors of the Companv sit ancl operote for the rhole State.

¶95

It is also contended that this clarification was not accepted by the State of Andhra Pradcsh and the Govcrnment of India rccoltled that the issue will be decided later, and the saure position continucs even as on 06.09.201 6.

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It is also stated that apportionrrcnt ol- u:;scls; lnd liahilities oi'ili Schedr-rle Institutions untler the Act bc[,lcgr t.hc succr:ssor liLatc:r is under consideration o{' the Comrrittec appointed by both Covernments.

¶97

The subsequent communif4tiqn dt.18.05.2017 ot thc \linistrr of Ilonre Afflirs. t nion of lnain t.f "r."t pondent) to lroth Slatcs : 32. On 18-05-2017, the foltowing communication was made by the Ministry ol Ilome Allairs, LJnion ol- India reaarding thc interpretation of the tenr 'Head Quarters', rvhir:h is differcnt liom the one stated earlier on 30.5.2015. It states:

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Offi ce .lI c trtot ttrttlurtr

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Subject : Definition o.f the 'Ileodquarter'in respect o/ bilin.cation q/ assets and liabilities o/'the Jitur lnstitlttiotl.\ ./ ('orporutions li.sted under Schedule lX o.l the A.l'. Reorgoni.sution ilLt, )011

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The de/inition of the^{'Headquarter'} .for the bifurcation of the assets and liabilities ol the lnstitutions / Corporations listed under Schedule IX of the A.P. Reorganisation Act, 20]4 has been examined in thi:' Ministry in consultation u'ith the Ld. Solicitor General oJ' lruliu. .,lctttrtlinglr. tha undersigned is directed lo convey the lbllou,ing^{in thi,sregurcl.}

¶103

(i) ln the t'ase o/ one single comprehen.tive State Undertaking (u,hich includes the hea(lquqrters and lhe opercttional unils in one contmon fhcility.l u'hich is exclu.tively located in, or^its oparation.\ are conJined lo one local area, il shall^be Ltpportioned on the busis oJ locatktn us per sub-section 9l) of Section 53 ol tlu inclhru l'raole.sh Rcorganizalion Acl,^2011. llou'ever, i/ the said State Undertaking's operations^are inter-Stale, then as per the proviso to Section 53,^the headquarters. i.e., the principal olfice of the Undertaking^is lo h( opporliotlcd itn population ralio and the operational unils ore lo bc upporlioned on loccttion basis.

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(ii ln the cuse of more lhan one common facility such^as v'orkshop.s, guast ho ies, and operulional plants etc., such enlilies^(annol he construed lo be part of'headquarter'.^The term lleadquarter' u,ould be co-terminous with^{the principal} oflice ol' thc L'ndertaking us per its ordinary dictionury nttuning. l'htrc/bra. in suth u casc. lhe operalional unils und hcudquurttr'.s v,oulcl he oplxrlionecl as per the^proviso lo .tcction 53 ol thr' ..lndhru ['rutlesh Reorganization Act, 20]4.

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-13.^{'l'he petitioner doos not acccpt this irrterpretation, but the} respondcnts I and 2 corltcnd that this itttetpretation ol the term^'Head Quarters'^{is con'cct.Wr shall dcal with that aspect a little later.}

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'I'hr stnnd of thc l nion of India (-1 'd rcsno nd ent)

¶107

'Ihe Ministry of-IIome All'airs. tJnion of India (3'd respondent) has not chosen to file any counter-affidavit in this Writ^Petition though more than 4 years have elapsed. The learned^Assistant Solicitor Ceneral subnrittcd that thc above Office^Memorandum dt. I u.5.20 i 7^'s contents bc taken as the stand of the Union of^{India in} the l'\atter.

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The second cou nter-affidavit ol the lclansana Statc l)ain l)cr clonnrcnt C ooneratir c }-edcration Linritcd l" rcs^D 0ndcnt

¶110

While admitting that the erstwhile A.P. Dairy^Develcpmetrt Cooperative Federation Limited had Units in^{Districts which} fallⁱⁿ thc new State ol Telangana and in the rcsiduary State ol Anclhra Pradesh and that the operations ofthe said entity were inter State, it^ts stated that since it is listed at Sl.No.73 of the IX Schedule to the Act, apportionment of assets and liabilities should bc done as per Section 53 of the Act.

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It is then stated that the Milk Products Iactory and the buildirrgs at Somajiguda, Hyderabad are cxclusitel.r' l(x'utt(.1 at llyderabad in the Telangana State and its operations are conllncd to the local arca. lt is stated that the operation of the Milk Products l'actor'1.', I Iyderabad rvas purely to cater to the nceds ot' thc l.win^('itie:s ol. l]l'clerabad anci Secunderabad and to the attachcd Dairy Units in lhc surrounriing arcas of }lvderabad.

¶112

According to the I 't respondent, thc I'actory at I lyderabacl is located separately at I-alapet with clear demarcation, with due fer-rcing. Security setup etc and it is nol a port o/ the [[ead Quarter,s i.e. Administrative Office of, the A.P. Dairy l)eveloprrent Cooperative Federation Limited, at Lalapet at any point o1- time. It is also stated that the Milk Products Factory is managecl separatelv by,a Genclal Manager, like any other Factory which cannot be distributcd as it cloes not come under the definition of 'Head Quarters'

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It is then contended that clarification regarding definition ol 'l lcad Quarters' was issucd by thc C.iovernrnent of India, Ministry of Horne Affairs in consultation with Ministry of Law and Justice vide Minutes of meeting dt.09-07-2015 and so no clarification^{was pending} u ith the^(lovcrnment of'India. It is stated that in the said Minutes, the tbilor.ving clari Ilcation u,as issued:

¶116

"'lhe tludqatrtLr tnclrul<'s vhcrt C EO'( hairnun/ Direclor of ( t)ttll)ut l \tt it]tLl t)l,rt ttt. lt)l tht v lttl,"\tute hut 'lid not agree u'ith the intirltrcr,trttti tit,tt t,t. t.r,,1.,'rttLs 'tht,h orL^{.t)ttttt)nl.' wecl b)the} ennrc Stttc t ill uls,, hL^putt14 the llettl Qtturter'^.

¶117

39, It is slated that a decision was taken to constitute^{a new Dairy} Development Cooperative Federation l,imited for the^{State of} 'i-clangana ln a joint Ceneral Body Mccting of the A.P.^Dairy Dcvelopment Cooperative Federation I-imited^{attended by the} Principal Secretaries olAnimal^I lusbandry and^{Dairy Developmentof} both States and thc 1'' r'espondcnt was registered on^04.03.2016.

¶118

It is statcd that thcreafier C.O.Ms.No.8^{dt'06.05.2016was} issLrccl by the Statc o1'^'lclanglana ordcring^{that all Milk/DairyUnits,} Chilling Centers, Ireed Mixing Plant, Gadwal, Milk^{Products Factory,} Ill,dcrabad rvhich are exclusivcly located ln Telangana State are transl-erred to thc l'r respondent

¶119

11, liaving said so, the^I respondent has also referred^to G.O.Ms.No.1 1 dt.l6.O7 .2016 said to clarifu G.O.Ms.No.8 dt.06.05.2016 mentioning that G.O.Ms.No.8 was^{\ssued pending} apportiontnent of assets and liabilities of^{the erstwhileA'P. Dairy} . Dcve lopmcnt Cooperative Federation I-irnited.

¶120

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¶121

;: ttr:;

¶122

It is denied that G.O.Ms.No.0g dt.06.05.2016 was issucd unilaterally or that there is any vioration of procedure or ilregality or arbitrariness in issuing the said G.O.

¶123

43' It is further stated that the Bank accounts of the erstwhire A.p. Dairy Development Cooperative Federatiorr l-imited were lrozen by the Banks pursuant to letter dt.or.06.20r6 0r'the Managing Director of the petitioner. It is stated that more than Rs.29.00 crores of funds relating to Telangana State were frozen in the conrmon Bank accoLrnts irr respondent Nos.4 to 9 Banks and clifficulties are being fbced in carrying out regular activities of the l" respondent. It is also stated that more than Rs.25.00 crores of G.O.l. Scheme fun<js relating to RKVY and NPDD and Telangana Stare Milk Incentive amount io farmers were also frozen.

¶124

According to l', respondent, petitioner had unilaterally given franchise to a privare Dairy M/s.Sambasiva Dairy products (lndia) Private Limited in Baranagar Mandar of Mahabubnagar Dish.ict and had started milk sales in the brand name 'Vi.iar,a' irr rhc |r,,.ir.r citics .r. Hyderabad and Secunderabad with an intention to damage the market sales of the 1" respondent,s^.Vijaya, milk; and had also issued a paper notification on 02.06.2016 inviring tcnders fbr saie ol. bulk Raw Chilled Buffalo milk and cow milk acting indepenclently and unilaterally by depositing their milk sale amounrs in their. accounts.

¶125

lt is contended that there is a Milk products l:actory ar vijayawada and several other Districts of the residuary State of Andhra Pradesh like the Milk products factory at Hyderabad. It w,as

¶126

MSR,J & TVK,J wp 22680 2016

¶127

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¶128

denied that surplr"rs milk l}om borlr States have to be processed and manulactured as pouch milk and milk products at the Milk Product Factory at I Iyderabad.

¶129

It is stated that the Administrative OJfice of the undivided A.P. Daily Development Cooperative Federation Lirrited consists of ground + four floors and that the ground floor is being shared in common, that first and second floors are in occupation of ltt respondent and third and fourth floors are in occupation of the petitioner and the offlce ol the Managing Director of the petitioner is in Lhc third and 1bur1h lloors ol the Administrative Building.

¶130

It is contcnded that as per Section 53(IXa) of the Act, the opcrational [Jnits o1' thc crstwhile A.P. Dairy Development Cooperative Federation [,inrited are to be apportioned between the l\o sllcccssor States on locatiorr basis.

¶131

( i ' t t t L^t t I i t ' t t \ trl tltc ltltt'L l,^(,.)tct'ul lot' llk Slole ol .4ttdhru Prudeslt ottd the^Atlvoc(le Ccier l fot the Slde of Telotlguttu

¶132

,18. Learned Advocate General lor the State of Andhra Pradesh contcnded that the State ol^'l'elangana is not empowered to uttilarcrally trarrsl'er any' assets of thc erstwhile A.P. Dairy Deve lopment Cooperative Federation Limited by issuing C.O.Ms.No.8 dt.06.05.20 l6l that the entirc basis of G.O.Ms.No.8 dt.06.05.10l(i is thc d.'L /1/.ri I'c location ol- tlie itents mentioned in the sairl^(1.(). r.vithin thc ncu Statc o1- .[ elangarra; that the Milk Products liactory at l{ydcrabad was a^'comrnon facility' and has to be treated atorrg with tlrc^'(iucst llousu" as an :isriet attached to 'Head Quaners',

¶133

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¶134

and should be apportioned as per proviso (b) to Section 53(l) ol'Lhc Act.

¶135

According to him, erecting of' f'cncing, Security setup, compound wall and managemenr through a Gcncral Manager of the Milk Products Factory cannot make the Milk products Factor.v at Lalapet distinct from 'Flead Quarters'.

¶136

He also submitted that, under the Act, the lJnion of lndia (3,,i respondent) is not assigned any role to adjudicate any dispute in regard to apportionment o1'assets and liabilitics in respcct ol'Schecjulc IX Institutions; and any clarification issued by the 3d respondent is not binding on the petitioner or on this Court. The powers ol the Union of India under the Act are only w.r.t appoflionntent of'esscts and liabilities between the successor States and not to the pSLls.

¶137

He pointed out that while G.O.Ms.No.8 dt.06.05.2016 seerns to indicate a final transfer ol assets by rhe Statc ol'I elangana ro the 1., respondent, the clar-ificatory G.O. Ms.No. l7 dt.16.07.2016 rnakes ir amply clear that it is not final and that it i( only a temporaty anangement pending apportionmenl of assets and liabilities ol' erstwhile A.P. Dairy Development Cooperative l.'erleration l,imitecl, and only an Administrative arrangement was made.

¶138

He also pointed out that the Guest House at Somaj iguda, Hyderabad of the erstwhile A.p. Dairy Development Ctooperativc Federation Limited canrlot be said to be intended only for people of -felangana and that peoplc fi.om .A.ndhra pradeslt llegion wcre al,,vays

¶139

MSR.J & TVK.J wp_22680 20t6

¶140

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¶141

using the said lacility and since it is not an'operational Unit', it has to be treated as pari of 'l'lead Quarters' and proviso (b) of Section 53(1) of the Act should be applied.

¶142

According to hinr, to determinc whcthcr an asset is par1 of 'llead Qualtcrs' proximity ol- location/distance from seat of Go Vclnance. is not malcrial.

¶143

lle relied upon the dccision of a Division Bench in G.Ayyappa Shiva Kumar v, Statc of Telanganar dealing with division of assets of 1'clugu Academy which is also a Schedule lX Institution and the dccision o1'the Suprcmc Coult in Andhra Pradesh State Council of l{igher Education Vs. Union of India2.

¶144

In cssencc, his contcntion is that the tcrm 'l lead Quarters' in its rurcarring shoLrld cnconrpass thc assets ancl liabilities pertaining to the IIead Office as rvcll as its associated common f'acilities established by thc crstwhilc Statc ol Andhra Pradesh lor use by the entire combined SLatc and have to be apportioncd between the two successor entities i.e. the petitioner and the l" respondent on the basis of population l litlo According to him, this is because common facilities were cleated over a period ol time by investing resources from the elstrvhile composite State of Andhra Pradesh to cater to the reqllirements ol the cntire Stale dernands and so both successor L'{1\ tit ies should get their lair share )

¶145

Orlrr ut.l2-l-1021 in w.P.No.lil6() o1-l(ll0^(l)ll) 'rlril6) 6 s('(' 615

¶146

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¶147

Learned Advocate General lor the State ol Telangana rclirtcd the said contentions.

¶148

According to him, a Division Ilench of ti'ris Court in^(l.Ranra Mohan Rao and anothe r Vs. Govcrnment of Andhra I,radeshl had held that the proviso to Section 53(1) ol the Act requires the asscrs and liabilities of Schedule IX Institutions r,',hich have become inler State by virtue of provisions of Palt II of the Act, to be appoftioncd (other than the Flead Quarler) on the basis o1'locatiorr irr cithcr. o1- 1hc: States; and that the r,,,ord 'l{ead Quartels' usccl in Scctiorr 53( 1 ) c'1 tirc Act anC its proviso, though not deflned in tbc Act. can on11,ntean 1/zc office that serves o.s the ctdministrotive (.ctlttt tsf'the rtntle rta*irl,,. anrl such Head Quafters ale rccluired to the apporiionccl beru,ccn thc lrr o successor States on the basis o1'population ra1io.

¶149

According to hirn, the Mill< ProdLrcr l;,rctor.y as $,.e11 a:. tfrc Guest House of the erstr.r,hilc A.P. I)airv Dcvciopnrent Coopcrativc Federation Limited are 'operational units' and they cannot be said to be 'l Iead Quarters' or administrative centers.

¶150

According to him, the Union of India is crnpowercd to intcr.prer the word 'Head Quarters' and such interpretation is binding on the petitioner because the petitioner itscll had solrght a clarification fiorr the Union of India.

¶151

Accolding to him, there is no illegality in the State ol 'l"lrrgrno i ssuing G.O.lrls.No. 8 dt.06.05.10 I 6.

¶152

'^{20 r 7 (6) ALD103 (DB)}

¶153

MSR,J & 1'VK.J wp_22680_2016

¶154

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¶155

-l'hc Doin ts for consideration

¶156

On the basis of the above contentions, the following questions

¶157

arise lbr considcration :

¶158

"(a) Ilthether the State of Telangana was entitled to issue G.O.Ms.No.8 dt.06.05.2016 transferring certain assels of erstwhile A.P. Duiry Developntcnt C'ooperative f'ederation Limited to the ]"' ra.sltoncle nl'?

¶159

(bt llharhtr G.O..\ls.-'o. l- dt.l6.()7.2016 i.ssued by the State o./ 7'clunganu t'luril.r,ing^{(i.0..V/r.."o.,</sup> dt.06.U5.)0I6 ond .ttuting lhot t lt,rl I./\ thtnt, ttntlit ( i O /r .'o ,\ rl (/.\ tttly u lctllut!)! .ttlDtini\tttrliIL .l t,t1i!t i)tt'i1l l)t'nlit.! LtPl)t)t lionnttnt of uS.tcl.: urul iitthiliLit: bLt\tt'('n pt:tint))itt Lt)kl l't tc::pontlant is binding on the l'' t t'.\lonclcnl (rntl )"' t L'.\pt)ndanl.)}

¶160

(c) li'ltttthu. untler the Act, the Union oJ' India has any lurisdiction^{in the apytrlknmcnlof asselsand liahilities ofinstitutiont} untl undcrtukings mcnti(,ned in Schedule lX to the Act and u'helher surh a jurisdcition €xlcnds to adjudicaling disputes in that regard belween the succ:es.tor States u their entities like the petitioner and the I't rcspondent'?

¶161

(d) | the l.lnion of lndia hus no pov,er under the Act to adjudicate trny dispute in rclation to apportionment of assets and liabilitics of in.stitutions and urulertakings menlioned in Schedule IX to the Act like the petilioner. utho can decide the said disputes?

¶162

(e) llrhether rhe tr'lilk Products Factory at Hyderabad and the Guest House of the erstwhile A.P. Dairy Development Cooperative l''edcration Limited ul Somajiguda, Hyderubad can be treated as C' t'ilitic.s relutublc to the JIead Quurters and so liable to be ttltltortionLti l;tttt,ut ltttittont,r und l'' rc.sltrtndanl in lhe^populattiotl ttttir.t tLnLltr proviyt /ltt to Stttittn 5it l) ol thL .1tt'!

¶163

( onrirlclation l)\ the ('0urt:

¶164

lla!4r4r

¶165

We shall fllst consider the lollowing point :

¶166

..LL:. \p 22680 20 t6

¶167

''(a) Whether tha ,Stutc rsl 'li,lungtttttr rrut cntitlet! to i.t.rut G.O.l4s.,No.8 dt.06.05.)016 trun..le rt.in,q L.(t.t(titi Lt.(,tt (t tt.\t\t llil(, A.P. Dairy Developntent Coopartrrit,e ledcru!ion !.intitetl to the 1,, respondent? '

¶168

It is not in dispute rhar rhc ersrwhilc A.l) Dain'[)cvclcrpntcnt Cooperative Federation t,imited at Sorna.jiguda. lJyderabad IS llll Institution mentioned at Serial No.73 ol.schedule IX ro rhe Acr

¶169

53' The apportionment of Asscts and t-iabiritic.s of such irrstitutiorrs is governed by part VI of the Act, and in particular by Section 53 thereof' This is specificaily stated in Section 6g of the Act. Secrion 68 states :

¶170

"68. Provisions /or various componies and corporations : 1l) Thc companies and corporations specified in the Ninth Schedule constitutedfor the existing State oJ'Andhra protlesh shal!, on anil from lhe appointcd day, continue kt jiotction in tho.sL ot.eas in resl)ecl i)f which they were Junctbning immerjiarelv he/i.trc thur dq.,. sulrje(.i to the provisions of this section.

¶171

(2) The assct.y. ri.qht; untl liubilitic.t ot the crtntput.tic,r untl corJloralion.:. rc/erred to in .stth-section (lt tltull l.tt, uytltot.titnt,tl behreen lhe .t,(.(.a...or ,\tctlct in tha trtu,tt,,t. ,.,.r.tt.itlt,ti itt ,\1,t./i,rt 53.^' (emphasis supplied.)

¶172

Section 53 states as under:

¶173

"53. Assets and liabilities o|f Store undertokiugs : (t) I.he as.ter.s ond liabititiis relating to any commercial or industriul undertaking of thc existing State of Andhra pradesh, where such untlertaking rtr pm.t thereof is exclusively locoted in. or irs opcrtrtions arc t.onfinr:tl to, rr local area, shall pass to the st(tre in vt,hit.h thltr ur(u is inc.rwretr r_tn the appointed day, irrespeclive of the locarion of.tts htaclquarters ;

¶174

Provided that where the operation of.such unrlertaking becomes inter'stare by virnte of the prot.isiott;; tt/' pttrt L rha asset.s. tttttr t taotttttes of .

¶175

MSR.J & TVK.J wp_22680 _20l6

¶176

i,23i:

¶177

kt) the opcrotiorutl unils ol the undertaking shall be apportioned heh+cen tlle ttlo.\ltcLc\sor,Slute.\ on Iocation basis; and

¶178

(b) the headquarters of such undertaking shall be apportioned balv,een the ltt,o succes.yor Stqles on the basis of population ratio.

¶179

(2.1 ltTtn uppttt tiottntcnl o/ the os.\ets and liabilities, such assets tod liabilities shull he transflrred in physical .form on mutual agreement or by makittg payment or adjustment through any other mode as may be agreed lo by the successor States. "

¶180

A reading of these provisions does not indicate who should apponion the asseis and liabilities of a Schedule IX Institution like A.P. Dairy Developnrent Cooperative Federation Limited at Sonrajiguda. Hyderabad between the successor entities of both States.

¶181

ln the co unter-ai'fl davit lrled by the l" respondent, and in the submissions of the lcarned Advocate-General for the State of It-langana, r-ro provision ot- the Act is brought to the notice of the (.'ourt cr.r-rpowc-ring the Sratc ol"l'clangana to take action in the manner' indicated in G.O.Ms.No.tl d1.06.05.2016 by transferring assets olthe crstw'hile A.P. Dairy Development Cooperative Federation Limited at Somajiguda, Fly'derabacl to the I '1 rcspondent on the basis of exclusive location in the State oJ'l'elangana.

¶182

3'/ . It is not the casc of the State of^'l'elangana that the State of Andhra Pradesh or the petitioner had agreed to such action by the Statc o1-'l-elangana prior to issuance of G.O.Ms.No.8 dl.06.05.2016.

¶183

5li. [n Andhra Pradcsh Statc Council of Iligher Education (2 sr4rla), thc Suprerne Court had dcait with an Institution in item No.27 o1' X Schedule by nane 'Andhra Pradesh State Council of t{igher

¶184

Education' and the apporrionment ol its asscts and liabiliries in the face of a similar unilateral action taken by the Government of Telangana/Telangana State Council of Highcr Education in directing the Bankers of the Andhra Pradesh State Council of Higher Education to freeze the accounts. The Bankers had obliged the said request olthe Govemment of Telangana/Telangana State Council of I.Iigher Education. A Writ Petition was filed by the Andhra pradesh State Council of Higher Education in the High Court of Hyderabad for borh States and the High Coun by it's judgrnent dt. 1.5.2015 had accepted the plea of the Govemment of Telangana,/'I'elangana Statc Council of Higher Education that all the amounts in the bank accor-rnts belong to the Telangana State council of Higher Frducation because or thc location of the erstwhile Andhra pradesh State council of IJiglrer Education at Hyderabad in Telangana area ol the undivicjed State o1. Andhra Pradesh .

¶185

Reversing the said judgment, the Supreme Court held that when an existing State is bifurcated to form two new States, there must be an equitable bfurcation oJ the assets and liabilities oJ the statutory bodies among the two sltccessor States as well, to ensure welfare of the public at large residing within these territories; tl.re State of Telangana cannot claim ownership over the entire Funds ancl assets of the erstwhile A.P. State council o1'Higher licrucation; such was not the intention of the parliament while enacting the A.p. Reorganization Act, 20 I4; and Secti.n 47 ol' rhc Acr w.hich pro'idcs

¶186

i:25i:

¶187

MSR,J & TVK,J wp 22680_2016

¶188

1br such equitable appoftionment of assets and liabilities among the successor States cannot be rendered useless and nugatory.

¶189

'l'he Supreme Court held that merely on account of the fact that Lhc institution, narnely, the erstwhile A.P. State Council of Higher I:clucatiorr happe'ned to bc in Ilyderabad, which is now part ol 'I'c'langana, there cannoi be complete takcover of assets of the erstu,hile A.P. State Council of Higher Education by the Telangana State Council for Ilighcr Irducation. It directcd bilurcation of the assets o1'the said Org.anization in the ratio 58 :42 between the successor entities and directed the Banks to defreeze the Bank accoLlnts.

¶190

'l-hough tl.re lcarncd Advocate Gerreral for the State of Telangar.ra soughl to distinguish this decision on the ground that it lclatcd to a Schcdulc X Institution. wc sec no reason why the logic/ratio ol'thc said clt'cision should not bc applied to a Schedule IX "lnstitution" like the A.P. Dairy Development Cooperative Federation L irriLed in Schedule IX.

¶191

.f hus. the action o t' the State ol 'l'elangana in issuing G.O.Ms.No.8 dt.06.05.2016 is not supporlcd by any provision of the Act and is contrary' to the principle laid down by the Supreme Court w.r.t bi1!rcation of instiLutions and it also appears to be unilateral, as it is not by consent. Therel'ore, the said G.O. cannot be said to be $inding on^the State^{of Andtu'a Pradesh or the petitioner}

¶192

wp 22680 20 t6

¶193

In view of the above decision of the Supreme Court, we holcl th?lt the State of relangana had no jurisdiction ro unilateraily issue G.O.Ms.No.8 dt.06.05.2016 and such action is contrary ro the principle of equitable distribution of assets and liabilities laid dou,n in thc Act.

¶194

Therefore, this point is answered in favour of the petitioner ancl against the respondent nos.l and 2.

¶195

Point^(b ) :

¶196

62, We shall next consider the following question :

¶197

"(b) Wherher C.O.Ms.No.t7 dt. 16.07.2016 i.;suctl b.y, rhe Srute ol Telangana clarifying G.O.Ms.No.g dt.06.05.2016 and stating thtrt what was done under G.O.Ms.No.g was only o tentative qrrongemenl pending apportionmenr of assets and riab irir:s heha,een peritioner (tnLr l"t respondent is biwlin,4 on lhe I't rc.sponrlent rttul ),,,1 re.,;1xtndert!.?,,

¶198

The contents of G.O.Ms.No.l7 dt.16.07.2016 issued by the State of Telangana indicate that the saicr c.o. was issued to claril, G.O.Ms.No.8 dt.06.05.20 t 6

¶199

64, In the G.O.Ms.No.i7, reference is made to both Sections 53 and 68 of the Act, and it is clearly statecl as unclcr :

¶200

"Whereas, Office spute ul lleudque.tcr of .1.1,. Duiq Dcwlr4tnuttt ( o- operative Federation l.imited, rtyderabad has been dittitred benpaen rwo States (two floors to Andhra pradesh and rwo Jloors to Telanguncr State) as a!-ttkfun_qsacenteu -htlhe-serwtit_tuJlt.c.ti9lius .a1..aI[s.q tl lpLlltc States.

¶201

Whereas, Telangana Slqte hus created its ov,n l-elungarn Stute Duir.1, Development Cooperative Federotion vide R.C.No.20g / 2016 Fecten., dt.04.03.2016 as per the decision taken in the Joint General Body Meeting of

¶202

¶203

..)1..

¶204

MSR.J & TVK,J wp _22680 ..2016

¶205

the A.P. Duiry Devclopmant C'ooperative Federation Limited held on t8. t2.2015.

¶206

I lcnce. pg11/41g 11A!r]!9!UL|! eI und liabiliries o{ A.P. Dain, Development Cooperotive Federation Limited. Hlderabad and A.P. Dairy Dcvlopnant Corporution lll:clerubad. and in ternL\ of Section 53 read with Scction 68 of the A.I'. Reorganization AcL 2011, as an adminisuative t!!:r!t!gr.L!r.nt.lQr^pt\a!! 1ta-9!.t!!!uta t!1-!per4!ia4s.l _uui!!_al_4].^pgry Qs^{ulbDnent ('ctoperutiyc l.eder1tion Lintited. H} rabad which are located in the State o{^'Ie Milk Producl Factorv at Hvderabad and {i-aeit HplSg _!t -5. rubad .l'ill ulmili,ttrutiv(, control o Telun Peve^{I oDmen t Coo?erative} !;^{c cbuttt} ttLt-^l-!nle/,I [4^ls ry1h^uel.

¶207

,lccordingl.r', thc C.()..14.s.No.0E dt.06.05.2016 is clarifed." (emphasis s upplied)

¶208

I)r'obably realizillg that its unilatcral action in issuing C.O.N{s.No.8 dt.06.05.2016 \4,ould cause problems in its relations \ ith the State of, Andhra Pradesh, as a measure of conciliation, the State ol^'l'elangana appears 1cl have issued G.O.Ms.No. l7 clt. I6.07.2016 clarilying that what it did wlrile issuing G.O.Ms.No.8 dt.06.05.2016 is only a "interim arrangement" made "pending opportionment csf .,lssets ond Liabilities of the A.P. Dairy Developntenl Cooperat i ,-e Federation l.i mited at Somajiguda, l-{t'derabad".

¶209

Now wc shall lcl'cr ro the latcr change in the attitude of the t-lnion of India conrnunicatcd through Office Memorandum Ir.No.12012 / 12 12014 -, SR dr.18.05.2017.

¶210

(r1 " An attinrpt is rnlclc in thc cou ntcr-a l'fi dav its filed by the ltt lcspondent to .jLrstily^(l.O.Ms.No.8 dt.06.05.2016 on the basis of an alleaed clarillcation issued by the Ministry of Home Affairs,

¶211

\p ll(rlJ0.1016

¶212

Govemment of India (3'd respondent) on 04.06.2016 and also again through Office Memorandunr F.No.l20ll I 20t4 str dt 18'05.2017 regarding the interpretation o1'thc terr, " Fleacrcluartcr.s',.

¶213

In our opinion, the earlier G.O.Ms.No.g di.6.5.2016 cannor be supported on the basis of any clarification issued by thc Union ol. India on 18.5.2017 after 06.05.2016; and the language o1. G'o'Ms.No.8 dt.6.5.2-ot6 clearly indicates that transfer of assets was made on the basis of excrusive rocation of- the asset.s menti.necr therein in the State of Telangana, the State of^.l-elangana had issued it unilaterally even before the apportionrnent of assets and riabirities between petitioner and I'r respondent under Scction 53.

¶214

69, In fact, as we shall presently show in our discussion undr:r Point (c) below, even the Union of India (3'd responclent) is not entrusted with any statutor)/ po\vcrs in rcspc;..t ol' ,.insritutions,. l<t express any opinion on the interpretalior-r o[. an), t3nn Lrsecl in Sec.5j of the Act, or bind either of the States or their successor entities or this Court by any such interprctation o{, any tcrrr uscd in the Act.

¶215

Accordingly, we hold that G.O.Ms.No. t 7 dr.16.07.20t6 accepting the transfer of assets to the l.r respondent as a rcmporutry arrangement binds the respondent nos. r ancr 2 and thar o,ly an interint arrangement was made under G.O.Ms.No.g dt.06.05.2016 lbr administration purposes, and the said action under G.o.Ms.No.g dt.06.05.2016 did not result in any /inat allocation of.assets and ; tiabilities between the petitioner and 1,, respon<ient.

¶216

MSR,J & TVK,J wp 22680 2016

¶217

Ii29ii

¶218

ln any event, il G.O.Ms.No.8 dt.06.05.2016^{is to be interpreted} asJinal allocation olassets and^{liabilities,the said action of the State} ol' l'clangana is whoilf^u ithout^{jLrrisdiction under the Act and does} not bind the SLatc o1'Andhra Pradesh or^{the petitionerbecauseit is a} unilateral action o1' the State of^{T'elangana, withoutconsent of the} Statc of Andhra Pradesh, which is not^{perrnitted under the Act by any} prov ision of Law.

¶219

Poin t^(c) :

¶220

72, Now. we shall considel Point^{(c) whichis as under:}

¶221

"(c) Whether lhe [Jnion of lndia, under the Act, has any juristliction in lhe appttrlionment of ar'sets and liabilities of^institutions end undertaking.t ntentioned^{irt Sc'hedule l,Y to the Act and whether} .tuch tt .juristlitliotl^(ttcnLls lo o(liuLiicalittg^{disputesin thdf regard} bettveen rhe successor^Slates or their^{entities likethepetitionerandthe} l'' rt'spondcnt?^"

¶222

7 3. I he Advocate-(ioncral tbr the^{Stale of- AndhraPradesh} corltcndcd that the lJniort^{of lndia hasbeen conlerred a limitedpower} unclcr Scction 7l ol the^{Act inrespect of IX and X schedule} institutions and that it has^{no po\'er10 interpret any provision of the} Act so as to bind the^{petitioneror the Stateo1'AndhraPradesh'}

¶223

But the Advocate-(leneral for^{the State ofTelangana} vcherrently contended that the^{Central Goverumentshas power under} Section 47 (4) and / or Section^{66 not only to interpretany provision} 01'thc Act, but it has also^{got power to adjudicatedisputesbetween the} successor entities ol' Schedtrle IX^{I nstitr'rtions.}

¶224

Section 7l o1'the Act^{on whichthe petitioner relies on states:}

¶225

\p l:680 :0 tr)

¶226

"71. Certain provisions for companies ; N ottt,ith.stunclirtg unything in this Port, the Central Government mtq,, fitr euc.h of thc t.<tmpunrc.:. specified in the Ninth Schedule to this Acr, is.st.tc tlircctions .

¶227

(a) regarding the division of the interesrs and .shares ol rhe existing State oJ Andhra prudes.h in the (.ompany bcht,cen lhe Succe;t'sor Stales:

¶228

(b) requiring the reconstitution ty' the Board o./.Directors of the Company so as to give adeguate representation to lhe sttccessor ,9tates. "

¶229

Section 71 and Section 6g ( alrcady exrractccl above) oocur in Part VII of the Act and deal with distribution or assets and liabiliries of Schedule lX Institutions.^,l.he limited powcr conli:rrcd on tire Union of India under Section 7l is t. issue trirec.lions with rcgarcl tn : (a) division of the interest s and shares of rhe cxisting State or,Andrrra Pradesh in a company mentioned in the IX schedule between rhe successor States; and (b) reconslitutiort r,tf th,t lloarrl o/.Directors ol a Company mentioned in the IX Scheclule so as to give adequate representation to the successor States.

¶230

We agree with the contention of the Advocate_Cieneral fbr the State of Andhra Pradesh, appearing for the petitioner, thar the tJnion of India has only the limited power of clivision of sharcs arrd reconstitution of the Board menlioned in Scction 7l with regartl to Institutions / Companies like the A.p. Dairy l)evelopmenr Cooperative Federation l,imited at Soraaj i gucia, I lyclerabad mcntione,d in Schedule IX of the Act, and that it has no other rore conlerrecl by the Act with regard to apportionment of assets and liabilities between the successor entities ofa IX Schedule Institution. Consequently it has

¶231

/- ,/

¶232

MSR.J & TVK.J wp_22680 2016

¶233

::31::

¶234

no adjudicatory powcr to interprct a pa(icular provision in favour of or against any successor entity.

¶235

The position however is slightly different with regard to apportionment of assets and liabilities ol the composire State of Anclhra Pladesh between the successor States of Telangana and residr,rary State of Andhra Pradesh as opposed to the successor entities o1- both thcsc Statcs in rclatiou to apporlior-rment of assets and liabilities o1-the Schedulc lX Institntions like A.P. Dairy Development Coopelative Federation l-imited at Somajiguda, Hyderabad of the conlpc,site State ol AndhIa Pradcsh.

¶236

Section 47 and Section 66 of the Act quoted by the AdvocateGeneral ibr the State of^'l elangana occur in Part Vl of the Act which deals with apporticrnmr:nt of asscts and liabilities between the sr.rcccssor States.

¶237

Section 47 states as undcr :

¶238

"47. -4pplictrtion o/ Put. /l) l'hc ltrovisiort.s tt/ this Purt shall apply in relatiotr to 1l1e q12p9rt ittn41911 qf the us!;et,s and liabilities o the existitt

¶239

/ ndhra I' nrle.s h i nt ned io tc, It he/itre the appointed day

¶240

(2) l'hc strtca.ssor Stutc.\ shall bc entitlcd to receive beneJits arising out ol rhc dccisionl tukcn b.t the existing Stata of Andhra Pradesh and the .\uLcessor Stute.s ;ltull ba li.,tble to beur the./inunciul liubilities arising out rd thc dt,cisirtt,t tuken h.1 tfu eritting,\tute oJ.4rulhrct Pradesh.

¶241

t3l lle^{qppptltpttLeLl!} 9l t+ueJs ond liubilities s

¶242

linuncial_99fu1;111t911$ .al(ry.,b9-19!9[1]!)lp]es!!9_j_u;I-!9459!tsbk-Std .c!l,uJlsi,l,9-!!UloJ!r9!ullr!t! lt !1!Jr!!!J-t-s!4 JfqLjljrlgs^{amongst thesuccessor} S.!.qk!-

¶243

(1) Any dispute regurding the antount ofJinanciul ossels and liabiliries :;hqll be l;ettled through mulual ctgreen?ent, fuiUlg which blt gAlgLbLLC Q!ts!__G9!9!!1ue-4yon^{rheodviceof theComptrollerand Auditor-General} of Inditr.^{" (enphu:i.r} supplicdl

¶244

rvp 2?680 3016

¶245

Thus, Section 47 emphatically deals rvirh apportionmenr ol assets and liabilities of the composite State of Andhra pradesh between the successor States and Sub-section (4) thereof entitles the Union of India to decide "any dispute,, regarding such apportionrnent on the advice of the comptroller and Auditor ceneral if there is no mutual agreement between the succcssor Statcs.

¶246

The A.P. Dairy Development Coopcrative [rederation I_inritcd at Somajiguda, Hyderabad of the composite State of Ancrhra pradesh is registered under the A.p. co-operative Societies Act, 1964. ancr is under Section 9 ofthe said Act a^.body corporate'.

¶247

So it has a distinct personality from that of the composite State of Andhra Pradesh. So the assets and liabilities of the A.p. Dairy Development Cooperative Federation Limited at Somajiguda, Hyderabad, prior to bifurcation, cannol bc treated as assets and liabilities of the composite State of Andhra pradesh ancr so section 47 cannot apply.

¶248

Section 66 of the Act states as under :

¶249

"66.^Power of Centrol Goverument to ortler dlocntion or odjut-tmant in certain cases.*llhere, by virtue of any o/ the prtsvi.sion.s ol this l,orr, either of the successor Stotes of Anclhra prade.sh untl Tblunganu hecomar entitled to any property or obtains an.y henefit.s .r bec,ntcs \ubJcct to um. liability, and the Central Government i;r of opinion. on u refbrence nttde within a period of three yeors from the appointerl day by e ithar of the States, lhal it is just and equitahle that such property or those beneJits shoulcl be trans/erred to, or shared with. the other sutce.ssor Srqk. or thol q contribution towards thot liabilin shoultt be mt.ult, hy thc rsrher suc.c.essor state, the s.tid propcrr.v' or bcneJits thul bc uloc(lted in tuch ntunner between the fwo States, or the other Sture shall nrrke to the Stute Suhicct to the liability such contribution in respect thereof, u_,; the Centrol Gr.tyernment

¶250

MSR,J & TVI(,J wp 22680 _2016

¶251

'.11..

¶252

may, arter consullatiott with the tyto Slate Goyernments, by order, determine.'

¶253

I:r,en this provision" in our considered opinion, is attracted only as regards apportionnrent of assets and liabilities of the composite Statc of Andhra Pradcsh between the successor States and will have no application to the appoftionment ol assers and liabilities of a IX Schedule Institution like A.P. Dairy Development Cooperative Federation Linrited at Somajiguda, Hyderabad of the composite State oi':\ndhra Pradesh fbr thc sarnc leasons as Section 47 would not apply to lL

¶254

8(r. 'l hcrefolc. u,c hold that the tlnion of tndia (3'd respondent) has ,lr)L bccn con lL'rrcd lrr LIrc Ac1 Lo har c anv .irrrisdiction in lelation to ISSLICS o1- appoltionnrcnt of assets and liabilities of IX Schedule Ir.rstitutions likc the crstu,hile A.P. Dairy Development Cooperative Irc,-lclation Linritcd at Sonrajiguda. vderabad between the petitioner and thc l" respondent except to the lirnited extent provided in Section 71 of the Act.

¶255

ln the absencc ol rrnl'specific statLltory power, any clarification w'ith regard to the interpretation of the term 'l-Ieadquarters' occurring in Section 53 of the Act in relation to IX Schedule Institutions given br.: thc IJnion ol'Inc]ia is thcrclbrc o1'no relevance and it is not binding on Lhe petitioner or the State ol Andhra Pradesh.

¶256

88, Wc firrlher dcclare tl.rat no 'adiudicatory power' is conferred ui-rJcl thc Act rx the tjnion ol' inclia in rclation to apportionrnent of assets arrd liabilitie's ol'a Schedulc lX lnstitution Iike A.P. Dairy

¶257

Development Cooperative Federation l.irnired at Somaiigucia, Hyderabad of the composite State or Andhra pradesh between the successor entities like the petitioner and the l,r respondent either.

¶258

This is because such^{.adjudicatory} po\,er, has t. be specificaliy confe*ed by a statute made by the parliament on the Union of India in relation to Schedule IX institutions, and existerrce of such power cannot be inferred by any interpretation ol the Act because such power is a substantive power and must clearly flow from the language of the statute.

¶259

So we hold on point (c) that the Union of India has no1 been conferred any jurisdiction by the Act in thc apportionment of asscts and liabilities of institutions and undertakings mentionecr in Schcclule IX to the Act except to thc linrited extcnt pr.r:r iciccl in Sccrion 7l or. the Act, and it cannot adjudicate disputes in that regard between the successor States or their entities like the petitioner and the I.1 respondent' The interpretation o| the term "r readquartcrs" in Sec.S-r r-.,r' the Act is not binding on the petitioner or on the State of Andhra Pradesh or on this Court.

¶260

Point (d):

¶261

We shali next consider the point (d) which is :

¶262

"(d) If the union of India ha.s no po\t.t,r untler the Att to adjudicatc uny dispute in rclutittn to uppot.ti( )nltcttt rtf u.:,tc,!.t rttu.! liabilities of in.rtitutions and untlertakings mentioned in Schedule lX to the Act like the petitioner, who ccm decide rhe said tjispules.?,,

¶263

MSR,J & ]'VK,J \ p_22680 _2016

¶264

In the instant case, proviso to Sec.53 of the Act has created a right in the petitioner to seek apportionment ol assets and liabilities of thc IX Schedule Institr.rtions like the erstwhile A.P. Dairy Dcvelopnrent^{(-'oopclaLivc} Fedcraiion Lirrited at Somajiguda, lll derabad r.vhich arc admittedly Inter-State Institutions after 1.6.1014. but Parlianrent has not provided for a remedy or a forum for lhc,.'nlorcenrcnt ol th is riqht

¶265

ln such a situation the plinciple ibijus ibi remedium would be attracted. i.e A party' having a grievance must have a remedy.

¶266

'l he Sr:plemc (.'ourt in D.K, Basu v, State of W.Br. explained:

¶267

"40. Ubi^jus, ibi remedium.-There is no wrong^{without a} rcmedtt. The lav, u'ill.s lhctt in every case u,here a man is wronged urul enJtmugecl hc mu.tt huve a remedy."

¶268

ln that case, the Court prgvided a remedy of monetary compensation lbr victirrrs oltofture /cusloclial violence/ death in police lock up by Statc olficials. It held:

¶269

'-11... ..1t1Lu tl o1 t,)ltlpcn.\Lttion lot tstubli.:hed in/ringemcnt o/ rhe inclelcu:ible rigltr.s guaranteed under Article 2l of the ('ott.ttitution i.s o rcntetll, utuilabLc itt public Lay'.since the purpose oJ' p bli.'ldt\ i.s ttot onlt to.ivili.sc puhlic ltoter hut also to ussure the t'ili:t'n.s lhut thq lirt' ttntlt'r d lrgdl .s..t.slcnt vh.'rcin their rights untl 1t1lctc.\t5.;hull l;a pt otcci,ci ttttLl lrttctt'a11. Gtuttt ol compcnsLttiun in proceedings nncler.4rliclc 32 or Article 226 o./ the Constitution of lndia ./br thc e.stabli.shetl victlatictn o/' the fundamental rights gucttunlcetl ttt cr .lttitlt, .l I. i.y trn exerci.re ctf the courts under lhe publit luv, luri.sdittirtn lrtt penuli.:it'tg lh,: v,rongdoer and./ixing lhe liuhilit.t .lrtr thc ptthllc rrong t))t lhe Slura u,hich .failed in the clisthtn'ge of its ptitiic dtty to prolect the -fundumental rights of the Liti:(n

¶270

\tp 12680 .l() t6

¶271

94, In Sardar Amar.iit Singh Kalra Pramod Gupta'.^-l hc

¶272

Supreme Court held,

¶273

" 33. ... ... As far as possible, courrs musl ulwo"-s uim to preservc and protect the rights of pariies and extend help to enforce thent rather than deny relief and thereby render the rigltts thent;;elves otiose, ,,uhi.jus ibi remedium" (u'here tht,rc i.r o ri,qht. tlttrt, is. r; r.t.ntt,dt.) ht,itt.t tt l.,rr.siL principle of jurisprudence. Such a c.our.sc u,otitl lt mrtre tondtrcit.c unrl hetter conform to a Jbir, rerLtonuhle and proper administrt ion t.l justice. "

¶274

In Bhagubhai Dhanahhai trhalasi v" t*te of (lu.inr:rr/,. ![ was

¶275

declared:

¶276

"10. A party having a grievance must haye u remecly. Access to .iustice^is a^humun ri54ht. When rhere exi.rts sr.rt h u righr. u di.sputant .. must have a remedy in lerm' q.,7, tlo(trine trhi irtt ibi rcnretlilrn

¶277

In our opinion, the remedy available under Afticle 226 c:f the Constitution of India is certainly available tr:, the petitioner becausc, under the said provision the lJigh Court, wouid have rhe po,,,,,r:r.. throughout the territories in relation to which it exercises jurisdiction to issue appropriate writ to any Government, within those territoriers fbr enforcemenl of any of the rights conl-errccl by Parr Ilt ol. the Constitution and for any other purpose i.e lor enforcement of rights conferred by a statute like the A.p. lteorgansiation Act.20 l4

¶278

97,^'l'herefore, for enforcement of. the right to seek ap,portionntent of assets and liabilities under Section 53 of the Act oI'thc erstu,hire Andhra Pradesh State Dairy Development Oo-operative }recleraLion

¶279

'^{(2oolI 3 scc 2i?-,} at oase 3o.t

¶280

" (2007) 4 SCC 241

\ili&J1tii

::31^'.:

Ltd^{established in the composite State of AndhraPradesh'the} petitioner^{is entitled to choose the remedy under Article226 ol} Cor.rstitution^{of India'}

¶285

ln^{this regard,we may takenote of Sub-Section(3) of Section} 40 ol the Act,^{and in particular, the words:}

¶286

" notwithstanding anyrhing^{contained in Suh-Sections (l) and} (2) rf this Section or^{in Section} -t'1, " '^{the High Courl at} Hyderabad shall^{have, and the High Courl of AndhraPradesh} .shall not have iurisr:liclkn^{lo ct'tlerlctin, hear or dispose of'} rot'ceclin s v,here^ut1 'suth roceedin ,! kan relie n t:gtp.eL:t lt ttry)t 9,::elct s.setl b the l'lish^('o rt at rabad b4, t:a-J b s 4q le r tl.L^{t t c !,1 It.t} -tttLltb'\el1p!^{( I Lg[S e c t i o n3 Q "} ( c m1.thu.s i s .s uppl ia tl I

¶287

gg" 'l he date rel-errcci to in Sub-Section ( l) of Section 30 is 0 I .0 I .20 19, the date when a separate High Courl for^{the State} of Andhra Pradesh started iunc-tioning for the territorial areas in the residuary State of Andhra Pradesh alier the Act was passed on 02.06.2014.

¶288

100" [n Lcttcr datcd 6.1.2019 sent by thc Andhra Pradesh High Court Advocates' Association rep. by its President, Amaravathi, Guntur District Vs. tJnion of India and othersT, a Full Bench of the IIigh Court ol'l'elangana at llyderabad held:

¶289

''16. tlr.riclt )26121 pt.otitled tltat the power to issue dircctions rtrtlcr,s or wit.s trnder Article 2)6(1) may be exerci.sed . h)., trn.t fli,!h ('otrt.t htling itrrisdir'ti.)11 ot,er lhe lerritories \1,i/hin .. rt'hitit tlu ctttr:c ttf ut.ttrlt. ,tholh t,r in pLu.l uri..e.. T,ha argttnent of th( L(, ').ted .\anior.(. ()L/rt.\t:t lt).\t\ .\ighL (l thc lbcl thar Sectiln 1{)(31 q/ the Act o/')01.1 tleols.vtith cases. u,hit,h arise out oJ or

¶290

".lrl I9 (2) ALI) l-5 t (t U)

¶291

"p^{22660 2016}

¶292

pertain to cases which were instituted hefbre the conlmon High (:ourt at l'l1,derubul at u ltoinr o/ tintt \j /tt: jt it t.ltt.l lttrt.t, 7n,,,.1, iuri.tdiLtion oyer hoth tht .\ttttt.r. tin(l tli(, .,.ttt,it,?th of tlte t.ctttsL,of action which arose *,ithin its terrilorie-t. As the c ol uctio n /0r tnstitutionol such cases oro.\a Vithin the i.stliction t he gatnuen_Htl!!!rt uru!! lt4crqhg_sL. thc i4u &Lq ! u! r rt _c.l etl! vith -li]to;g- t:ttl:) ttoo(l (t)..\ttllt,,t,rl tti tltLrt ,toit1 o,/ tittL !t\L,lt SyeAul7lJl-pl.Jll l!! l)l )ll! ! lla,r c1.1. t t rrtint uttt! ../r...\ \r/r./r iurisdiction in the llyda rub otl I |irh (' the limited matter ar i.sin oltl o sttch c^{'ases ythich} tycrc dcal!:r.ith the common Hi L"ourt ut erohud ut tt oint of tintt^y: had iurisdiction to tical r. ith lhen. n' AU:llAl !/ UllUtA 1JU. L Q.!tt! ! tttlJ qrJ ctf a separate Hish Court lbr the Dres(n! St(tte u1'.4ndlt:!! llr!dt-.\h There is therefore no conflict behreen Section l0(3) oJ the Act of 2014 and Article 226(2) of the Constitution. " (emphasis suppliect)

¶293

l0l. In the instant case also. thc causc ofaction tbr institution of tlris

¶294

Writ Petition arose within the territorial .juriscliction of the corrmon i{igh Court at Hyderabad when the Act lva s brought into e1l'ect t iLIr effect from 02.06.2014, ancl when Ser:tion 5l o1- the Act came into operation (conferring right on thr: petitioner to si:ck apportionrrcnl o^l' assets and liabilities ol Schcdule lX Flntities like tl-re crslu'hilc^A.P. Dairy Development Cooperative l"edet'ation^{l-iinitcdat Somajig,uda,} Ilyderabad).

¶295

Therefore,, the^jurisdiction to^{deal r'r'itl.r this caseslood} crystallized on 02.06.2014^{itselfand so tliis Writ Petition was rightly} entertained by the^{High Court of Judicaturc at l.Iyderabadin 2016and} can be decided by^{the High Court for the Statc of 'lelangana, whichis} its successor, since it^{has jurisdiction over th0 tcrritoriescovered by} the State^{of'Ielangana. Point (d) is answeredaocordingly'}

¶296

MSR,J & TVK,J wp_22680_2016

¶297

::39::

¶298

l'oint^(c)

¶299

Now we shall consider the last point which is as under:

¶300

(e) llhether tfu ,\tilk l'roduct.v l;actory ul Hyderabad and the Guest Llousc o/ tha tr:tu'hile A.P. Dairy' Davelopment Cooperative l.'ederatbn Limited ut Somajiguda, Hyderabad can be treated as 'common facilities' relatable Io the Head Quarters and so liable to be apportioned behueen petitioner and l"t respondent in the population ratio under proviso^(h) to Sectbn 53(l ) ol the Act?"

¶301

10.1. It is the contention ol the learned Advocate General lor the State o1'Andhra Pradesh appearing for the petitioner that the Milk l)r'oducts lractor'1, at Lalapet in I lyderabad was a Central Dairy with nrodern tacilities fbr processing and packaging milk and milk ploducts to cater to thc needs 01'consumers duly processing rnilk reccived tiom a// the l)i,\tricrs ol undivided State of Andhra Pradesh; that the Guest I lousc o1' the crstu'hile A.P. Dairy Developrnent ('ooperative Federation l.irnited was also a common facllii7 intended arrd uscd lbr thc bencriL o1- Ofticels and l-i.mployees^{workingin the} tcrritory which is now lalling in the rcsiduary State of^Andhra Pradesh; and that these trvo assets were always treated as 'common lacilities' of the I lead Quarters/l-lead Office/Registered Office^where corporate functions were being carried out. According to^the pctitioner, these cornmon lacilities have been created over a period of LI IIC by investing resoLrrces l'rom the elstwhile State of Andhra Pladesh to catcr to the rc.luirements ol the entire State demands;^and "... so the^rneaning ol^{the term 'Head} Quarters'^{should encompassthe} asscts and liabilities pcnainirrg to the flead Office as well^{as its} associated comrron ccntcrs/tacilitics establishcd^{by the erstwhile State} i

¶302

wp t2680 10,6

¶303

ofAndhra Pradesh for use by the enrire cornbined State; and they arso have to be apportioned between the two successor States, entities on the basis of population ratio. Reriance is also placed on sub-Section (3) of Section 47 of the Act which directs that ,apportionment of assets and liabilities shalr be subject to the such firnncial adjusttttent as may be necessary to secure just, reasonable and equitahle apportionment of assets and liabilities among the success<.tr states,.

¶304

The leamed Advocate General fbr the State of Telangana refuted the said contentions. According to him, the Miil< procrucrs Factory and the Buildings at Somajiguda (including rhe Guesr Flouse of the erstwhile A.p. Dairy Development Cooperative Federation Limited) are exclusively locate<l at Ilyderahad in the new Statc olTelangana and their operations are conJine,l to the local ctrea. According to him, the operations of the Milk producrs Factory, Hyderabad was purely to cater to the needs or'thc 'I.u,in citics .,rHyderabad and Secunderabad and to the altached Dairy Units in the surrounding areas of Hyderabad. The Milk products f.actory at Hyderabad is located separately at Lalapet with clear demarcarion, due fencing, Security set up etc ond it is not o part oJ.the Heacl Quarters i.e. Administrative Ofrice of the erstwhile A.p. Dairyt Development Cooperatitte Federation Limited at an)) point oJ.tinte. The Milk Products lactory is managed scpararely b1,a Cener.al Manager, like any other factory which cannot be distributed and the said Unit/asset does not come under the definition of .I-lead euarters,.

¶305

; f

¶306

::rll::

¶307

MSR.J & TVK.J wp_22680 2016

¶308

In para-ll of the additional counter affidavit filed by I" rcspondent, this is reitcrated and it is stated that Milk Products Factory was also set up at Vijayawada falling in the territory of the residuary State of Andhra Pradesh apafi from Chittoor, Nandyal, Visakhapatnarn, Ongole,^(iuntur and Nellore Districts.

¶309

No reply al'lldavit is liled by, the petitioner denying avenlenrs cr.rnLained in para- | I ol the additional counter-affidavit filed by the l'' rrspondcnt.

¶310

l{egarding Milk Products firctorl at Ltlanet. Hl,derabad

¶311

l0B. I'herefbre^jn vierv o1' setting up ol several Milk Product lactories in the State o1'Andhra Pradesh, the Milk Products factory at Laiapet, I lyderabad cannot be said to be a 'cornmon facility' catering tt.r the needs ol the arcas which now fall in the residuarv State of Andhra Pradcsh. It has to bc taken as having its operations confined to thc territory lalling under the new State o1' Telangana only. We thcrefore re.ject the plea ol the learned Advocate General for the State ol Andhra Pradesh to trcet the Milk Product factory at Lalapet, I Iydcrabad as part of 'l{ead Quarters'.

¶312

licsrr rd in s⁽ⁱ ucst ousc a t Sonrl iigutlu, IIldcrabatl

¶313

I09. Coming to the^(iucst I lousc at Sornajiguda, Hyderabad of the erstwhile A.P. Dairy Development Cooperative Federation Limited, in .. oLrr opinion, such a l'acilitv cannot be said to be intended, prior to 0206-1014. to bc used onlr, lbr thc bcnellt ol' the ljnits of the said Irederation in the^'lelangana area of the composite State of Andhra

¶314

¶315

wp_?:680 l0l6

¶316

Pradesh. It would certainly have been used by employees/Ofliccrs ot' the entire composite Statc of Andhra Pradesh i1'they hacl any work in the IIead Office which u,as adn.rittedlv located in Hyderabad. lt also cannot be said to be 'operational unit' (mentioned in clause (a) o1' proviso to Section 53 o1'the Act) which tcrr.r.r would nonnalll appl;only to assets such as Milk Products lactory and a Guest I lousc u,iil not fall in that category. Therefore the said'Girest l-lor-rse' canrlot be said to exclusively belong to the l" rcsponclc'nt undcr clausc^(a) ol' proviso to Section 53 of the Act on 'location basis'. Its apportionment has to be done by treating it as an asset of the'llead Quarters'^{of the erstwlriieA.P. L)airy l)cveloprrent(.oopclatire} Federation Limited under clause (b) of Section 53 olthe Act

¶317

In G.Rama Mohanrao and another (3 supra). a Division Bench of the common Iligh Court at llyderabad was consider ing lhc question whether a Government Order G.O.Ms.No.1 l2 dt.l 8.06.2016 issued by the residuary State of Andhra Pradesh keeping in abe'vance the enhancing the age olsuperannuation oi'cinplc,yccs ol'public sc'ctor' ur-rdertaking under the administrative contlol ol'thc saici Ciovernntcr.tt from 58 to 60 years, was illegal or arbitrary and whether such er-nployees are entitled to continue in servicc till the;- attain thc ar:r: o1superannuation ol 60 years.

¶318

At para-59, the Division Bcr.rch made the following observations regarding the word 'lIead Quartcrs' uscd in Scction 53( 1) and in the proviso thereto:

¶319

MSR,J & TVK,J wp_22680_2016

¶320

::rl3::

¶321

"l-he yortl heard quarters. used both in section

¶322

53(l) urul it.\ proyi,\o. though not de/ined in the Act, can only mean the olJice that serves us the administrative cenlre o/'the underlaking.^"

¶323

'l'he learned Advocate General tbr the State of Telangana placed strong reliance on this statement in support of his contention that except the adr-n inistrative centre, no other lacility can be treated as 'I Iead Quarters'

¶324

We are of the opinion that no issue regarding apportionment of assets of IX Schedule Institutions under Section 53 of the Act arose in tlre said casc ol^(J.Ranra llohan li.ao and others (3 supra) and the issuc in the said case relaled to bifurcation of employees of IX Schedule entities.^'l'he said observation was really not necessary to clccidc thc issue u'hich Icll 1br consideration bv the Division Bench. In fact in para-6 I, the Division Bench observed 'the exercise of trpl-trtrt ion menl i.e. allotment of assets^(except possibly in relation to the Head Quarters oJ' some) of mosl of the Companies/Corporations /Soc ieties belonging to the erstwhile State of lnclhra Pradesh, bebveen the Companies/Corporations/Societies of the strccessor States oJ"l'eLangana and Andhra Pradesh, is complete.' This statement is t-actually incorrect as in this very case relating to clstr'r,hile A.P. Dairy l)eveloprnent Cooperative Federation Limited, sucir apporLionment ha:, r-iot oc:curred till datc.

¶325

Recentl.v-, this Court had dealt with tlie case of G.Ayyappa Shiva l{urnar ( 1 supla) regarcling thc I'elugu Academy, another IX

¶326

wp _22680 20t6

¶327

Schedule Institution and also l{.Sumathi r.^-I.clangana State Housing Board8 regar<Jing the erstlr,hile A.P. IIoLrsing Boarcl

¶328

We therefore are of the opinion thar those obscrvations in G.Rama Mohan Rao and others (3 supra) are mere obiter clicta. We are also of the opinion that the word^.Head euarters, would not only comprise the Administrative center/principar o{fice but also comrnon facilities like Guest House of an inter s/are undenaking particularly when such facility was utilized for operations in the undivided state of Andhra Pradesh. Undoubtedly, a Guest House would have been used by officers/Emptoyees coming from all over the urndi'ic.lcd Srate of Andhra Pradesh to Hyderabad and so it has to be treated as common facility of the l{ead euarters faliing un<jer clause (,b) ol. proviso to Secrion 53( I ) of the Acr.

¶329

Under sub-Section (2) of Section 53 of the Acr, rwo ,odes ol apportionment of assets ancr tiabilities are ,renrioncd i.e. transftir in physical form or by rnaking paylrent or adjusturcnt through any orhcr mode, though the statute states there must be agl.eement between the States/successor entities. It cannot be contcnded that unrcss there is a mufual agreement, there cannot be appoftionment of assets anC liabilities between the petitio,er and the r" r.espondenr at ail. ,r.his Court is entitled to apply one or other modes of apporrionn.rcnt mentioned in sub-Section (2) of Section 53 of the Act even in the absence of any rnutual agreement belwccn pe1itioner and I ., respondent.

¶330

l^*]1t]1"]']i"l^{Nos.4l9l3 of 20r8.J378qirncrr0.r(,9orj()rc)} rrlrrcrr rracr Lrren rreci,recJ r:, l0 0: :0:0 ( DB )

¶331

MSR,J & TVK,J wP 22680_20t6

¶332

: :{5: :

¶333

The Guest House at Somaliguda, Hyderabad of the erstwhile A.P. Dairy Developrtrent Cooperative Federation Lirnited cannot be slrared in physical lornr by the petitioncr and the l" respondent, which arc the successor entities ol both the States. l'herefore its current cost on malket value basis must be tal(en into account and be apportioned bctrrccrr the petitioncr and the 1'' respondent in the population ratio i.e. 58.32 : 41.68

¶334

ll3. IIorv the nralkct valuc is to be ascerlained for such apponioument o1'assL'ts and liabilities ol Schedule IX Institutions?

¶335

I l.l. Guidancc to resolve the said problem is provided in SubSection 14) of Section 47 of the Act which directs that any dispute regarding the antotmt o./Jinuncial assets and liabilities shall be settled thrr,tugh mutual agreement, failing which by order by the Central Cot ernntent on the udvice of'the Comptroller and Autlitor General of Ittliu.

¶336

ll5. Though Section 47(41 of the Act would not apply to Schedule lX Institutions as already held above, still issues of valuation of properly being contentious, require an impartial and respected authoritv to resolve

¶337

I 16.^'fherefbre, ln olir considered opinion, the Comptroller and Ar-rditor General of lndia can be directed to help the petitioner and the i'' i'e-spondent in thc urattcr of providing rnarket valuation of the Guest llor-rse propcrty at Somajiguda belonging 10 the erstwhile Andhra lj'raciesh Dairy Devclopmcnt Co-operalive F'ederation.

¶338

..{u;,

¶339

$p 11680:0to

¶340

Either the petitioner or the l,trespondent can make a request to the Comptroller and ALrditor Ceneral of lncjia to supply the maLkcr valuation of the said property. Within g weeks ol such request bcing received from either party, the Comptroller and Auditor Ceneral oi. India shall cause such valuation to be made and supply it to both sides.

¶341

118' within three (03) months .f receipt of such communication from the Comptroller and Auditor (ienerar or'rncri., thc 5g.32g6 sharc of the petitioner shall be transferred ro the peritioner by thc I,, respondent.

¶342

l{c rd ing the ,\dministra tive 0llicc

¶343

The building housing the Administrative otfice of the erstwhile A.P. Dairy Development cooperative Fecreration I-imited is adnritred by the I't respondent to be a^,l-lead euarters, Ialling unclcr clausc (b) ofproviso to Section 53(l) ofthe Act.

¶344

In the minutes of the first Joint (A.p. and^.i.. S.) General 13 otly, Meeting of the erstwhile A.p. Dairy Development Cooperarive Federation Limited held on 1g.12.2015, it was agreed that the said Building would be shared 5g : 42 ratio betwecn the petilioner and l,r respondent.

¶345

So the said arrangoment shall irnrnediatell, bc ntade in relation to the said administrative office as rve, as assets ana riabilities in relation thereto in supersession of the arrangement maclc in proceedings No. I39IADMN.V/2014 dt.20.05.2016 (as rnenrionr:cl in

¶346

.. 11.. MSR.J & TVK,J ..-t/.. wp_22680 2016

¶347

para-l lA of the additional cour.rter-al'fidavit filed by the I'r respondent o1'allocating first and second floor to 1" respondent, third and fourth tloor to the petitioner and ground floor to be used commonly).

¶348

llcgarding ollrer inrnror irblc asscts

¶349

120.^'fhe assets and liabilities of respective Milk Product factories ancl othcr opcrational [.]nits shall be shared under clause (a) olproviso to Scction 53( l) o1'thc Act on^'location basis'.

¶350

llrgardins anlounts lvins to thc crcdit ol llanl( accounts of thc crstn hile ,.P. I):rin⁽ ooncr:rtivc l)er e lonmcnt l"edrration [.imited in re s oondcnt Nos.-l to 9llanlis

¶351

l2l. Regarding anrorrnts lying to the credit of bank accounts in lespondent Nos.4 to 9 Banks olthe erstwhile A.P. Dairy Development Coopcrative l--ederation t.imited as on 02-06-2014, the same shall be sl.rared in the ratio 58.12 : 4l.6tl by the petitioner and the I't rcspondent.

¶352

Itc rt rtlin liabilities of lhe erslrvhile A.P. Dai [)cv elo D ment Coo D e rative I,'cd c rution l,inr itcd

¶353

122,^'l'he Iiabilitics o1- the operatictnal Units of the erstwhile A.P. Dairy Development Cooperative Federation Limited shall^be apporlioned betwccn petitioncr and l" respondent on 'location basis' as per clausc (a) ol proviso to Section 53 ol'the Act; and the^liabilities ol- lhc^'l-{ead Oltorters' shall be appo(ioned between the^petitioner aud l'' respondent on thc basis olpopulation ratio i.e. 58.32 :41.68

¶354

I'he petitioner and the l"'respondent are at liberty to^{take the} rr*(s.istance ol the Comptrollel and Auditor General of India in^the cvcnt of any disagrecrncrlt ln regard to valuation of assets and

¶355

wp 22680 t0 t6

¶356

liabitities of Head quarters or operational units of the erstrvhile A.p. Dairy Development Cooperative Federation l,imited and the latter shatl give all possible assistance for resorving the sa,re expeditiously ifapproached by the parties.

¶357

Accordingly,

¶358

(a) the Writ Petition is allowed;

¶359

(b) the action of the State of Telangana in issuing C.O.Ms.No.g Animal Husbandry, Dairy Developmenr and Fisheries (D1,.ll) Department dt.06.05.2016 is declared as illegal, arbitrary and conrrary to the A.P. Reorganization Act, 2014 and the said G.O.Ms.No.g Animal Husbandry, Dairy Development and F.isheries (D-,-.ll) Department d1.06.05.2016 is set aside;

¶360

(c) G.O.Ms.No.17 dt.16.07.2016 is declared to be only an interim arrangement made by the l.' respondcnt for administrativc purpose s and it is declared that it also does not bind thc peritioner;

¶361

(d) the Ministry of Horne Affairs, Union ollndia (3.,r respondenr) is declared to have no jurisdcition in (i) thc apporrionnrent of.assets ancl liabilities of Schedule IX Institutions except ro rhe limited extenr provided in Section 71 of the Act or (ii) ,adju<iicating, any dispute in that regard between the petitioner and the I " respondent;

¶362

(e) For enforcement of the right to seek apportionment of assets and liabilities under scction 53 of the Act of the ersrwhire Andhra Pradesh State Dairy Developrnent Co_opcrutive Fcdcration l.rd

¶363

,,49ii

¶364

MSR,J & TVK,J wp_22680 2016

¶365

established in the composite State of Andhra pradesh, the petitioner is entitled to choose the remedy under Article 226 of Constitution of India and this Court has the jurisdiction to decide it;

¶366

(1) the Administrative Office of the erstwhile A.p. Dairy Development Cooperative Federation Limited and the assets and liabilities in reiation thereto shall be divided as per clause (b) of proviso to Section 53(1) of the Act in the ratio 58.32 :41.68 in supersession of the arangement made in proceedings No.139/ADMN.Vl20l4 dt.20.05.2016 (as mentioned in para-l1A of the additional counter-affidavit filed by the 1't respondent of allocating first and second floor to i't respondent, third and fourth floor to the petitioner and ground floor to be used commonly) within four (04) weeks;

¶367

(g) As regards the Guest House at Somajiguda, Hyderabad of the erstwhile A.P. Dairy Developrnent Cooperative Federation Limited, it's current value on market value basis, as determined by the Comptroller and Auditor General of India, must be taken into account and be apportioned between the petitioner and the I't respondent in the population ratio i.e. 58.32 :41.68. Both pafiies are given liberty to approach the said Authority to supply the market valuation of the said propefty. Within 8 weeks of such request being received from either party, the Comptroller and Auditor General of India shall cause such valuation to be made and supply it to both sides; and within three (03) mqnths of receipt of such communication from the Comptroller and

¶368

Auditor General^{of India,the58.32%o share of the petitioner shallbe} transferred^{to the petitionerby the1't respondent;}

¶369

(h) in view of setting^{up of several Milk Product factoriesin the} State of Andhra^{Pradesh,the Milk Productsfactoryat Lalapet'} Hyderabad^{cannot be said to be a'common facility'cateringto the} needs of the areas^{which now fall in the residuary State of Andlra} Pradesh. It has^{to be taken as having its operations confined to the} territory falling^{under the new State of Telanganaonly'We therefore} rejectthepleaofthelearnedAdvocateGeneralfortheStateof AndhraPradeshtotreattheMilkProductfactoryatLalapet, Hyderabad^{as part of 'Head} Quarters';

¶370

(i) the assets and^{liabilitiesof the operationalUnits of the erstwhile} A.P. Dairy Development^{Cooperative FederationLimitedincluding} the Milk Products^{factory at Hyderabad shallbe apporlionedas per} clause.(a) of^{proviso to Section 53(1) of the Act on 'locationbasis'} within two⁽⁰²⁾ months;^{and the parties atlibertyto take the} assistanceoftheComptrollerandAuditorGeneraloflndiainthe event of any^{disagreementin regardto such valuation and the latter} shallgiveallpossibleassistanceforresolvingthesameexpeditiously if approached bY^the Parties.

¶371

regarding amounts^{lying to the credit of bank accountsof the} 0) erstwhile A.P.^{Dairy DevelopmentCooperative FederationLimited in} respondent Nos.4 to^{9 Banks as on 02-06-2014,the same shallbe} shared in the ratio^{58.32 :41.68 by the petitionerand the 1"} respondent within^{four (04) weeks; and}

¶372

MSR,J & TVK,J wp 22680 2016

¶373

::51: :

¶374

(k) Telangana State Dairy Development^{Co-operativeFederation} Ltd. (the I't respondent) shall not^{operateBank Accounts in} respondent nos.4 to 9 Banks till^{such apportionment as mentioned} clause (j) above takes^place.

¶375

(l) Assistance of the Comptroller^{and AuditorGeneral of Indiacan} be taken by either or both^{partiesin respect of valuation of assetsor} liabilities of Head Quarters^{or operational unitsof the erstwhileA'P'} Dairy Development Cooperative^{FederationLimited, if requiredand} the latter shall^give all^{possible assistancefor resolvingthe same} expeditiously ifapproached^{by the parties.No costs'}

¶376

Consequently, miscellaneous^{petitions pending,if any,shall} stand closed.

¶377

/iTRUE COPYII

¶378

Sd/. K, SAILESHI ASSISTANT REGISTRAR \t-

¶379

SECTION OFFICER

¶380

One fair copy to the Hon'ble Sri Justice M.S. RAMACHANRA RAO (for His Lordships Kind Perusal)

¶381

One fair copy to the Hon'ble Sri Justice T. VINOD KUMAR (for His Lordships Kind Perusal)

¶382

To,

¶383

'1 . The Comptroller & Auditor General of lndia, O/o. The Comptroller & Auditor General of lndia Pocket-9, Deen Dayal Upadyaya Marg, New Delhi-1 0 124.

¶384

1. The tt/anaging Director, Telangana State Dairy Development Coop. Federation Ltd., Vijaya Bhavan, Lalapet, Hyderabad - 500 017.

¶385

The Principal Secretary, State of Telangana, Animal Husbandry, Dairy, Development & Fisheries (Dy.ll) Department, D Block, Secretariat Buildings, Hyderabad.

¶386