Writ Petition No. 663 of 2025 · The High Court
Case Details
- 1 - NC: 2025:KHC:17980 WP No. 663 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF MAY, 2025 BEFORE THE HON'BLE MRS JUSTICE K.S. HEMALEKHA WRIT PETITION NO.663 OF 2025 (CS-EL/M) BETWEEN: SRI M.P. CHANDRASHEKHAR, S/O SRI M. PUTTASWAMY, AGED ABOUT 51 YEARS, R/AT MARASINGANAHALLI VILLAGE, KOPPA HOBLI, MADDUR TALUK, MANDYA DISTRICT-571 428. (BY SMT. VAISHALI HEGDE, ADVOCATE) ... PETITIONER AND: 1. 2. 3. 4. STATE OF KARNATAKA, REP. BY ITS SECRETARY, DEPARTMENT OF CO-OPERATION, M. S. BUILDING, BANGALORE-560 001. DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, MANDYA DISTRICT, MANDYA-573 201. ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, MANDYA SUB-DIVISION, MANDYA-571 440. MARASINGANAHALLI MILK PRODUCERS CO-OPERATIVE SOCIETY LTD., REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER, MARASINGANAHALLI VILLAGE, MADDUR TALUK, MANDYA DISTRICT-571 419. REG. UNDER CO-OPERATIVE SOCIETY ACT, 1968-69. Digitally signed by MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:17980 WP No. 663 of 2025 5. 6. 7. 8. CO-OPERATIVE ELECTION AUTHORITY, REPRESENTED BY THE COMMISSIONER, 3RD FLOOR, T.T.M.C. BUILDING, A-BLOCK, SHANTHI NAGAR, BANGALORE-560 027. THE DEPUTY COMMISSIONER AND THE ELECTION OFFICER, DISTRICT FEDERAL CO-OPERATIVE SOCIETIES, MANDYA DISTRICT, MANDYA-571401. MANDYA DISTRICT CO-OPERATIVE MILK PRODUCERS’ SOCIETIES’ UNION LIMITED (MANMUL) GEJJALAGERE, MADDUR TLAUK, MANDYA DISTRICT-571 428. REPRESENTED BY ITS MANAGING DIRECTOR. REG. UNDER CO-OPERATIVE SOCIETY ACT, 1968-69.
Legal Reasoning
(‘Union’ for short) is before this Court in this writ petition. 2. Heard Smt. Vaishali Hegde, learned counsel for the petitioner, Smt. Hemalatha .V, learned AGA along with Smt. Prathima Honnapura, learned AAG for respondent Nos.1 to 3 and 6, Sri Sandesh T.B., learned counsel respondent No.4-society. 3. Learned counsel for the petitioner drawing the attention of this Court to Section 28A (4-B)(1) of the - 4 - NC: 2025:KHC:17980 WP No. 663 of 2025 Karnataka Co-Operative Societies Act, 1959 (for short ‘KCS Act’) submits that respondent No.4 being not a assisted society, therefore, the nomination of respondent No.8 by the State Government to the Board of Management of respondent No.4-society violates Section 28A (4-B)(1). 4. Per contra, the learned counsel for respondent No.8, learned AAG and counsel appearing for respondent No.4 – society submits that the society has received a sum of Rs.1 Lakh from the MLA fund sanctioned by the Government on 06.02.2024 and as such, the respondent No.4 is an assisted society as defined under Section 2(a-1-1) of the KCS Act and as such, nominating the respondent No.8 as a representative of the Government to the board of director of respondent No.4-society is in conformity with Section 28A (4-B) (1) of the KCS Act. 5. In support, learned AAG produces the copy of the notification dated 06.02.2024 indicating that there was grant by the Government to the society. The CEO of the - 5 - NC: 2025:KHC:17980 WP No. 663 of 2025 respondent No.4-society files an affidavit stating at paragraph Nos.3 and 4 as under: “3. I stated that the society have received the amount of Rs.2,792/- from the Zilla Parishath, through District Rural Development Society, in way back during the 1986, that has been reflected in the audit report for the year 1986-87. Copy of the audit report from the year 1986-87 is produced same may kindly peruse the documents. 4. I state that the Assistant Commissioner of Mandya sub-division had issued official remainder dated 06/02/2024, under the local area development scheme of the MLA had granted Rs.1 Lakh rupees for the development of society, thereafter the society was handed overing the site for work as estimated in the notification dated 06/02/2024.” (Emphasis supplied) 6. It is stated by the State and the private respondents that the present writ petition is by the member of the society who has no locus standi, as under Section 29- G (4)(j) of the KCS Act it only empowers the Chief - 6 - NC: 2025:KHC:17980 WP No. 663 of 2025 Administrative Officer of the society who can sue or be sued on behalf of the cooperative society. 7. In this context, learned counsel appearing for the petitioner submits that the contention of the respondents that the writ petition filed by a member of the cooperative society is not maintainable under Section 29-G(4) (j) of the KCS Act is unsustainable. It is submitted that Section 29-G (4)(j) merely empowers the Chief Executive Officer to sue and be sued on behalf of the society, it does not prohibit an individual member or share holder for independently maintaining a writ petition and therefore, the arguments addressed by the respondents cannot be accepted. 8. Having heard the learned counsel appearing for the parties, the question that falls for consideration is: (i) Whether the notification issued by the respondent No.1 nominating respondent No.8 as a nominated director of respondent No.4-society is legally valid? - 7 - NC: 2025:KHC:17980 WP No. 663 of 2025 (ii) Whether the petitioner has a locus standi to file the present petition challenging the nomination in view of Section 29-G(4)(j) of the KCS Act? Re: Point No.1: 9. Section 28-A(4-B)(1) of the KCS Act, reads as under: “28A. Management of co-operative societies vest in the board.- xxx (4B)-(1) The State Government may nominate one person as its representative on the board of every assisted society other than the board of a primary agricultural credit co-operative society. The nominated person can vote in all meetings and elections of the co-operative society; and also can contest in all the elections of the Co- operative Society. The ex-officio members and nominee from financial or credit agency shall have the voting right but are not eligible to contest as office bearer: Provided that the person so nominated as a member of a co-operative society shall hold office - 8 - NC: 2025:KHC:17980 WP No. 663 of 2025 as such member during the pleasure of the State Government.” 10. The plain reading of the aforesaid section indicates that the State Government may nominate one person as its representative on the board of every assisted society other than the board of a primary agriculture credit cooperative society. The criteria for nominating one person as its representative by the State Government is that the society has to be an assisted society. Assisted society is defined under Section 2(a-1-1), which reads as under: “2. Definitions.-In this Act, unless the context otherwise requires,- (a-1-1) “Assisted Society” means a co-operative society which has received the Government or State assistance in the form of share capital or loan or grant or guarantee for repayment of loan or interest.” 11. As defined, the assisted society means a society, which received the assistance in the form of share capital or loan or grant or guarantee for repayment of loan or interest by the Government or State. The document produced by the - 9 - NC: 2025:KHC:17980 WP No. 663 of 2025 State indicates that the respondent No.4 – society was assisted by the Government from the funds as is indicated in the notification dated 06.02.2024 and the same corroborates with the affidavit filed by the CEO of the society. This being so, the nomination of respondent No.8 by the State to respondent No.4 - society is valid and in conformity with Section 28-A(4-B)(1) and Section 2(a-1-1). 12. The Co-Ordinate Bench of this Court in the case of Sri. S. Prakash and others vs. The State of Karnataka, Department of Co-operation, Rep. by its Secretary and others1 (S.Prakash) has observed at paragraph No.11 as under: “11. In the instant case, the Zilla Panchayath had given the grant of Rs.3,00,000/- in the year 1994 and 1996, which is clear from Annexures-R1 to R3. During the said period, the word ‘State’ was not a part of the definition of the expression ‘Assisted Society’. It is not the case of the respondents that the 3rd respondent has received the assistance from the Zilla Panchayath after the amendment of Section 2(a-1). The assistance 1 ILR 2010 KAR 4375 - 10 - NC: 2025:KHC:17980 WP No. 663 of 2025 received by the Society some time in the past cannot be taken into account for treating it as an assisted society. The nomination under Section 29(1) of the Act should have been made within a reasonable period from the date of receipt of the assistance. Since time is not stipulated in the statute, the power to nominate the members should be exercised within a reasonable time from the date of rendering assistance. It is relevant to note here that while defining the expression ‘Assisted Society’, present perfect tense has been used, which clearly indicates that the assistance must have been received in the immediate past and not at any time in the past. The cardinal rule of construction of statute is to read the statute literally, that is, by giving to the words their ordinary, natural and grammatical meaning unless that leads to some absurdity or the words are susceptible of another meaning. In the instant case, the literal construction leads to no apparent absurdity and therefore, there can be no compelling reason for departing from that golden rule of construction. A Division Bench of this Court in GANAPATHY SEETHARAM BHAT vs. STATE OF KARNTAKA has taken a similar view, which is as under: “Admittedly, in the instant case, the State Government ceased to be a share - 11 - NC: 2025:KHC:17980 WP No. 663 of 2025 holder because the subscription made to the share capital has been returned. It cannot be considered that the State Government continues to be a member or it can be deemed to be a member only because at some time past the State Government had subscribed to the share capital.” (Emphasis supplied) 13. The coordinate bench of this Court held that the nomination under Section 29(1) of the KCS Act should be made within a reasonable period from the date of receipt of the assistance by the society. In the instant case the assistance is received by the society on 06.02.2024 and the respondent No.8 was nominated as a director by the respondent No.1 on 28.02.2024. Under the said circumstances, the appointment by respondent No.1 cannot be found fault with. Accordingly point No.1 is answered. Re: Point No.2 14. Section 29-G(4)(j) of the KCS Act reads as under: “29G. Appointment of Chief Executive.- x x x - 12 - NC: 2025:KHC:17980 WP No. 663 of 2025 (4) The Chief Executive shall be the Chief Administrative Officer of the society and shall, subject to the general supervision and control of the board and such other conditions and restrictions as may be specified in the bye-laws,- (j) sue and be sued on behalf of the co- operative society.” 15. Plain reading of the aforesaid section indicates that it is only the Chief Administrative Officer of the society who has a right to sue and be sued on behalf of the cooperative society. The petitioner as a member of the Society cannot challenge the nomination of respondent No.8 as a representative / delegate for respondent No.4 – society unless he shows that his legal or constitutional rights are affected. The Apex Court in the case of Daman Singh and others vs. State of Punjab and others2(Daman Singh) has held at paragraph No.11 as under: “11. The next submission of the learned Counsel was that Section 13(8), (9) and (10) did not make express provision for the issue of notice to the members of the concerned cooperative societies and were, therefore, violative of the 2 (1985) 2 SCC 670 - 13 - NC: 2025:KHC:17980 WP No. 663 of 2025 principles of natural justice. He argued that in the absence of any provision, the rules of natural justice may be read into the provisions and notice to the members of the affected societies was imperative. Otherwise, he argued, members of one society would be formed against their will and without being heard to associate themselves with members of another society. We have no hesitation in rejecting this submission also. Once a person becomes a member of a cooperative society, he loses his individuality qua the society and he has no independent rights except those given to him by the statute and the bye-laws. He must act and speak through the society or rather, the society alone can act and speak for him qua rights or duties of the society as a body. So if the statute which authorises compulsory amalgamation of cooperative societies provides for notice to the societies concerned, the requirement of natural justice is fully satisfied. The notice to the society will be deemed as notice to all its members. That is why Section 13(9)(a) provides for the issue of notice to the societies and not to individual members. Section 13(9)(b), however, provides the members also with an opportunity to be heard if they desire to be heard. Notice to individual members of a cooperative society, in our opinion, is opposed to the very status of a cooperative society as a body - 14 - NC: 2025:KHC:17980 WP No. 663 of 2025 corporate and is, therefore, unnecessary. We do not consider it necessary to further elaborate the matter except to point out that a member who objects to the proposed amalgamation within the prescribed time is given, by Section 31(11), the option to walk out, as it were, by withdrawing his share, deposits or loans as the case may be.” (Emphasis supplied) 16. The issue involved in Daman Singh’s case pertained to the vires of statutory provisions that authorize the compulsory amalgamation of cooperative societies in the interest of the movement and the broader public interest. The Apex Court examined whether such legislation infringes upon fundamental rights, particularly the right to form associations and unions guaranteed under Article 19(1)(c) of the Constitution. The Apex Court reasoned that once a cooperative society is registered under the Act, it becomes subject to the statutory framework governing such societies. Therefore, members cannot claim absolute autonomy over its affair or invoke Article 19(1)(c) of the Constitution. The petitioner in the present case is unable to substantiate that he has been prejudicially affected by an act or omission of - 15 - NC: 2025:KHC:17980 WP No. 663 of 2025 the society for him to challenge the same before this Court. There is no satisfying explanation offered that the impugned action is likely to adversely affect him and this Court is unable to appreciate as to how the petitioner is aggrieved by the appointment of respondent No.8 as nominated member by respondent No.1 exercising the power under Section 28- A(4-B)(1) of the KCS Act. Accordingly, point No.2 is answered. 17. The petitioner has made out no legal grounds for interference and accordingly, the petition is dismissed as devoid of merits. Sd/- ________________________ JUSTICE K.S. HEMALEKHA MBM List No.: 1 Sl No.: 2
Arguments
SRI M.K. HARISH BABU, S/O KRISHNEGOWDA, AGED ABOUT 46 YEARS, R/AT MARASINGANAHALLI, KOPPA HOBLI, MADDUR TALUK, MANDYA DISTRICT-571 428. ... RESPONDENTS (BY SMT. HEMALATHA V., AGA A/W SMT. PRATHIMA HONNAPUR, AAG FOR R-1 TO R-3 AND R-6; SRI T.L. KIRAN KUMAR, ADVOCATE FOR R-5; SRI B.L. SANJEEV, ADVOCATE FOR R-7; SRI SANDESH T.B., ADVOCATE FOR R-4; SRI A. MOHAMMED TAHIR, ADVOCATE FOR R-8) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED NOTIFICATION DATED 28.02.2024 BEARING NO.CO 225 CNS 2024 (E) VIDE ANNEXURE-A PASSED BY THE 1ST RESPONDENT STATE GOVERNMENT IN THE INTEREST OF JUSTICE AND EQUITY AND ETC. THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 25/04/2025, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING: - 3 - NC: 2025:KHC:17980 WP No. 663 of 2025 CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA CAV O R D E R The petitioner aggrieved by the notification dated 28.02.2024 issued by the respondent No.1 appointing respondent No.8 as the nominated Director of the board of management of the respondent No.4 – Society and also aggrieved by the draft eligible voters list dated 04.12.2024 published by respondent No.6 including the name of respondent No.8 as a representative / delegate for respondent No.4-society in the election to the Mandya District Cooperative Milk Producers Society Union Limited