Sri Somashekara Vs the Registrar of Co-Operative Societies

THE ADDITIONAL REGISTRAR OF CO-OPERATIVE SOCIETIES (CONSUMPTION AND SALES) OFFICE OF OTHER REGISTRAR OF CO-OPERATIVE SOCIETIES, NO.1, ALI ASKAR ROAD, BENGALURU - 560 052.

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TOTA UTHPANNAGALA MARATA SAHAKARA SANGHA NIYAMITHA (TUMCOS) BY ITS MANAGING DIRECTOR HAVING ITS REGISTERED OFFICE AT CHANNAGIRI - 577 213 DAVANAGERE DISTRICT.

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…RESPONDENTS

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(BY SRI. HARISH A.S, AGA FOR R1 AND R2; SRI. P. ANAND, ADVOCATE FOR R3)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 12.08.2021 PASSED BY R-1 REGISTRAR OF CO-OPERATIVE SOCIETIES IN APPEAL VIDE ANNEXURE -G. CONSEQUENTLY, RESTORE THE ORDER DTD 18.03.2021 PASSED BY R-2 VIDE ANNEXURE-F.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

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ORAL ORDER

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The petitioners are before this court seeking for

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the following reliefs:

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a) Issue a writ in the nature of certiorari or any other writ to quash the order dated 12-08-2021 passed by respondent No.1 Registrar of Co-operative Societies in Appeal No.RCS/DAP/D1/01/2021-22 as per Annexure-G.

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b) Consequently, restore the order dated 18-03-2021 passed by respondent No.2 Additional Registrar of Co-operative Societies in case No.RCS/PRS/ THIDDUPATI/ 65/2020-21 as per Annexure-F;

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c) Pass any appropriate writ, order or direction as this Hon'ble Court deem it fit and proper in the facts and circumstances of the case and allow this Writ Petition with costs, in the ends of justice and equity.

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The petitioners are members of respondent No.3-Tota Uthpannagala Marata Sahakara Sangha Niyamitha (hereinafter referred to as ‘TUMCOS’ for brevity), which has a registered office in Channagiri but the area of operation of the said Society is comprised of four Districts namely Davanagere, Shivamogga, Chitradurga and Chikmagalur. The object of the Society is stated to be to protect the interest of the farmers of garden process namely arecanut, coconut, dry-coconut, banana, betel leaves, jackfruit, maize, black pepper, cardamom,

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clove, koka, thale and to secure higher rate for their producers by the said growers, who are members of the Society.

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The Society sought to carry out various amendment to the bye-laws. The petitioners are aggrieved insofar as the Clause- 5(1) and 5(2) of the bye-laws of the Society by virtue of which ‘A’ category membership is sought to be restricted to the residents only in Chennagiri District of the growers by way of garden process. The said bye-laws having been sent for approval. The said bye-laws were rejected by the 2^nd respondent vide order dated 18.03.2021 at Annexure-F on the ground that the same was discriminatory.

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An appeal has been filed before the 1^st respondentRegistrar of Cooperative Societies. The Registrar allowed the said appeal which would in turn amounts to allowing the amendment and directing the competent Authority to register the amendment. It is

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aggrieved by the same petitioners are before this Court.

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The submission of Sri.M.R.Rajgopal, learned Senior Counsel appearing for the petitioners is that the area of operation of the Society being Davanagere, Shivamogga, Chitradurga and Chikmagalur. The question of restricting ‘A’ category membership to residents of Chennagiri alone is discriminatory and violative under Article 14 of the Constitution of India. The growers by way of garden process in Chennagiri residents, they may or may not be resident. Such restriction on ‘A’ category membership could not be made. All the growers by way of garden process in the area of operation of the Cooperative Societies ought to have been held to be eligible. The rights of such growers by way of garden process in areas other than Chennagiri have been hostilely discriminated and ‘A’ category membership is sought to be retained only with the growers in Chennagiri.

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Sri P. Anand, learned counsel for respondent No.3Society seeks to support the said order of the Registrar on the ground that the amendment having been passed in an Annual General Meeting (hereinafter referred to as ‘AGM’ for brevity) and the Registrar has given residents to the choice of the members as expressed in the AGM.

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Heard Sri M.R.Rajgopal, learned Senior Counsel for the petitioners, Sri Harish A.S., learned AGA for respondent Nos.1 and 2 and Sri P.Anand, learned counsel for respondent No.3 and perused papers.

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The short question that would arise for consideration is:

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“Whether an amendment which ex-facie is discriminatory can be allowed to the bye-laws of a Co-operative Society merely because the Annual General Meeting of the Cooperative Society were to approve it.”

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Section 12 of the Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as ‘the Act’ for brevity) is reproduced hereunder for easy reference:

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“12. Amendment of bye-laws of a co-operative society:-

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[(1) A co-operative society may amend its bye-laws in conformity with the provisions of this Act, and the rules made thereunder from time to time:

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Provided that every co-operative society shall make amendments to its bye-laws in conformity with the amendments made to this Act or the rules from time to time within ninety days from the date of coming into force of the said amendments.]

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[(1-A) Every proposal for such amendment shall be accompanied by such fee as may be prescribed, and different fees may be prescribed for different class or classes of co-operative societies]

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(2) Every proposal for such amendment shall be forwarded to the Registrar and if the Registrar is satisfied that the proposed amendment,-

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(i) is not contrary to the provisions of this Act and the rules;

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(ii) does not conflict with co-operative principles;

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(iii) satisfies the requirements of sound business;

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(iv) will promote the economic interests of the members of the society; and

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(v) is not inconsistent with the principles of social justice;[he shall, within a period of three months from the date of receipt of the proposal, register the amendment]

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[ (2-A) If the Registrar is unable to dispose of such application within the period specified in sub-section (1), the amendment of bye-laws shall be deemed to have been registered.]

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[ (3) When the Registrar registers an amendment of the bye-laws of a society or where an amendment of the bye-laws is deemed to have been registered, he shall issue to the society a copy of amendment certified by him and such certificate shall be conclusive evidence that the amendment of the bye-

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law has been duly registered or deemed to be registered, as the case may be.]

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(4) Where the Registrar refuses to register an amendment of the bye-laws of a co-operative society, he shall communicate the order of refusal, together with the reasons therefor, to the society.

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[ (5) If it appears to the Registrar that any amendment of the bye-laws of a co-operative society is necessary or desirable in the interest of such society, the Registrar may, by order, call upon the co-operative society, to make the amendment proposed by him in such manner as may be prescribed and within such time as he may specify.

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(6) If such amendment is not made by the cooperative society within the time specified in the said order, notwithstanding anything contained in the Act, the Registrar may, after giving the co-operative society an opportunity of being heard, register the said amendment and forward a copy thereof to the co-operative society along with a certificate signed by him which shall be conclusive evidence that the amendment has been duly registered.]”

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A perusal of Sub-Section (1-A) of Section 12 would indicate that every proposal for such amendment shall be accompanied by such fees. Sub-Section (2) of Section 12 would indicate that every proposal for such amendment shall be forwarded to the Registrar and if the Registrar is satisfied that the proposed amendment is not contrary to the provisions of the Act and the Rules, does not conflict with the

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Co-operative principles, satisfies the requirement of sound business, will promote the economic interest of the members of society and is not inconsistent with the principles of social justice that the amendment would be approved and the amendment registered.

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Merely because an amendment is approved by the AGM and forwarded by the Society to the Registrar would not result in the amendment being automatically approved and registered. It is for the Registrar to apply his independent mind to the amendment and only if the requirements of SubSection (2) of Section 12 of the Act are satisfied that the Registrar would approve the amendment and register the amendment.

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Looked at from the perspective of the mandatory requirement of Sub-Section (2) of Section 12 of the Act, the present amendment restricting the ‘A’ category membership to only growers in Chennagiri,

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in my considered opinion, would conflict with the Cooperative principles inasmuch as the area of operation of the Society is in Davanagere, Shivamogga, Chitradurga and Chikmagalur. As such,

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the growers in each of those districts would be entitled to be members in the ‘A’ category.

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The economic interest of all the members being required to be satisfied restriction of membership to ‘A’ category to a particular area would not be in the interest of the members of the growers in Davanagere, Shivamogga, Chitradurga and Chikmagalur, who are also members of the society.

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The principles of social justice would also not be favourably addressed, if membership is restricted to a particular area denying such category of membership to growers in other areas of the operation of the society. The membership to ‘A’ category or any other category would have to be open to all the growers in the area of operation of

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the Co-operative Society i.e., Davanagere, Shivamogga, Chitradurga and Chikmagalur.

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The Registrar has not considered the mandatory aspect of Sub-Section (2) of Section 12 of the Act resulting in him allowing the appeal and approving the amendment merely because the AGM has approved the amendment.

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As such, I answer the point raised by holding that it is only if the mandatory requirements of Sub-Section (2) of Section 12 are satisfied that an amendment is required to be approved by the Registrar and thereafter directed to be registered. If the requirement is not satisfied merely because the amendment has been approved by the AGM would not result in automatic approval by the Registrar. As such, I pass the following:

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ORDER

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i) The written petition is allowed .

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ii) A certiorari is issued, the order dated 12.08.2021 passed by respondent No.1Registrar of Co-operative Societies at Annexure -G, insofar as amendment to bye-laws 5.1 and 5.2 are concerned is hereby quashed. Needless to say that any consequential order passed in pursuance thereto would also stand quashed.

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iii) It is made clear that the amendments insofar as bye-laws 5, 5(3), 5(4), 5(5), 6, 10, 23, 29 and 39(2) are not adverted to in the present writ petition.

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Sd/(SURAJ GOVINDARAJ) JUDGE

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KTY

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List No.: 1 Sl No.: 46

Sri Somashekara v. the Registrar of Co-Operative Societies

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Sri Somashekara v. the Registrar of Co-Operative Societies

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