This Writ Appeal challenges the Single Judge's order quashing the bifurcation of a Cooperative Society due to non-compliance with government guidelines on economic viability. The Court rejected the appeal, upholding the single judge's decision that restricting the bifurcation protects the financial interests of members.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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WA NO. 989/2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF JULY, 2024
PRESENT
THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE C M JOSHI
WRIT APPEAL NO. 989 OF 2019 (CS-RES)
BETWEEN:
SRI CHELUVARAJU H.P, S/O LATE K PRABAKAR, AGED ABOUT 60 YEARS, R/AT GANDHI GRAMA VILLAGE, KASABA HOBLI, NELAMANGALA TALUK, BANGALORE RURAL DISTRICT-23.
...APPELLANT
(BY SRI SRINIVAS V, ADVOCATE)
AND:
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BANGALORE RURAL DISTRICT, ASSISTANT REGISTRAR OF CO-NO.14, NAVODAYA SAHAKARA BANK BUILDING, 15TH CROSS, 10TH A MAIN ROAD, MALLESHWARAM, BANGALORE-03.
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AGED ABOUT 49 YEARS, R/AT KALASEGOWDANAPALYA VILLAGE, HONNASANDRA POST, KASABA HOBLI, NELAMANGALA TALUK, BANGALORE RURAL DISTRICT-23.
…RESPONDENTS
(BY SRI DEVARAJ.C.H, GOVERNMENT ADVOCATE FOR R-1 TO 3; SRI D.K.SRIRAMAPPA, ADVOCATE FOR R5-10; R4 SERVED AND UNREPRESENTED)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE APPEAL BY SETTING ASIDE THE ORDER DATED 04/12/2017 PASSED BY THE LEARNED SINGLE JUDGE IN THE WRIT PETITION NOS.3884538850/2015.
THIS WRIT APPEAL HAVING BEEN HEARD AND RESERVED ON 25.06.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, C.M.JOSHI J ., DELIVERED THE FOLLOWING:
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JUDGMENT
Aggrieved by the order dated 04-12-2017 passed by
the learned Single Judge in Writ Petition Nos.3884538850/2015, appellant/respondent No.5 therein has filed this Intra Court appeal.
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2 therein to act as per the Act and Rules while discharging the duties as Public Officers.
of Directors, bifurcation of the Society into two was sought, i.e., to create one more Society for 30 villages, and retain the said Gandhi Gram Society for three villages viz., Gandhi Gram, Honnasandra and Krishnarajapura. When the said proposal was placed before respondent No.4ARCS, under Section 14 of the Karnataka Co-operative Societies Act, 1959, he rejected the same on 25-05-2013 and later, the matter was taken to the DRCS in appeal. By order dated 21-04-2014, DRCS allowed the appeal and directed the ARCS to initiate appropriate action for bifurcation of the Society. Then on 4-2-2015, DRCS called for certain statistics and later recommended and
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issued direction to bifurcate the society by letter dated 3007-2015.
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Articles 243 ZH to 243 ZT, there cannot be any restriction for formation of the Co-operative Societies. It is contended that the impugned order of the single Judge is violative of such right conferred upon the appellant and therefore, the same is not sustainable in law.
7 . Per contra , the learned counsel appearing for
respondent Nos. 5 to 10 contended that the Co-operative Societies, in the nature of Agricultural Co-operative Societies deal with financial transactions of lending loan to the farmer members. Therefore, to ensure the economic viability of the Societies, NABARD and Reserve Bank of India, have issued certain Guidelines and the same was reflected in the Circular issued by the Government. The learned Single Judge has noted that the Guidelines issued in the Circular to ensure the economic viability of the Society was not adhered to and therefore, has quashed the proceedings for bifurcating the Gandhi Gram Society. Therefore, he submits that no fault can be found with the order of the learned Single Judge.
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8. Having considered the rival submissions of the
parties and having perused the records made available to us, we are of the view that no sustainable ground is made out to interfere in the impugned order for following reasons.
version) prescribe the following Guidelines:
“Guidelines for registration of Primary Agricultural Credit Co- operative Societies:
a) Every primary agricultural credit co-operative society should hold 5000 acres of cultivable area.
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b) To the maximum extent, area of operation of the society should not exceed the limit of 8 kms from the head quarters.
c) Generally, not more than one such societies should exist in one village.
d) It should have capacity of lending at least Rs.1000 Lakhs as short term loan.
e) Area of operation of such societies should not overlap.
f) Every society should have capacity of meeting the necessities of at least 600 families.
g) If necessity to register society afresh is found, it shall have capacity to fulfill of the aforesaid guidelines and should collect at least Rs.2-00 Lakhs share amount."
that the economic viability and its accessibility to the poor farmers are the main criteria for creation of the Primary Agricultural Credit Co-operative Societies. The question whether the orders passed by the DRCS and the ARCS would comply the guidelines was aptly considered by the learned Single Judge in para 4 of the impugned order as below:
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"4. It is seen that the fourth respondent herein is informed by the Co-operative Development Officer of Nelamangala Taluk by his letter bearing No.Sa:A:A:Ne/Krupa/2013-14 dated 26.04.2013 and bring to the notice of fourth respondent the lacuna in resolution of the sixth petitioner Sangha supported by some of the members in accepting the same and agreeing for forming separate Sangha for 3 villages by giving the facts and figures on column-wise basis, wherein it is seen that the extent of cultivable land which comes under the new Sangha formed for 3 villages is 994.30 acres as against the minimum of 5000 acres, the extent is little less than 20% and as against 600 families should be members, it is seen that there is only 128 families by indicating that the percent is little more than 20% of the population. As regards the borrowers number is concerned, it is only 113 and it has disbursed the loan of Rs.12,57,000/- as against minimum requirement of Rs.10 crores which works out to only 1.27%."
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and with capital which far less than the one prescribed in the Circular, covering meager number of families was not favoured as it would put the interests of the members into jeopardy. It appears that the resolution was passed in the Meeting of the Board of Directors due to some personal reasons and those reasons cannot be a ground when the larger interest of the people of the villages is involved. Therefore, we are unable to accept the contentions of the learned counsel for the appellant that the impugned order suffers from any illegality.
Sd/JUDGE
Sd/-
JUDGE
tsn*
3 issues framed by the court
Whether the High Court can interfere in the order of the Single Judge which dismissed the plea to bifurcate a cooperative society on grounds of non-compliance with economic viability guidelines.
Whether the bifurcation of a Cooperative Society without adhering to NABARD/RBI guidelines regarding minimum acreage and capital was legal and sustainable.
Whether the restriction on the formation of Cooperative Societies violates the fundamental right to form associations under Article 19(1)(c).
SRI CHELUVARAJU H.P
STATE OF KARNATAKA
THE REGISTRAR OF CO OPERATIVE SOCIETIES IN KARNATAKA
THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES
THE ASSISTANT REGISTRAR OF CO OPERATIVE SOCIETIES
VEERAMARE GOWDA
V KAMESWAR RAO
C M JOSHI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
