Karnataka High Court
Vyavasaya Seva Sahakari Bank Ltd vs The State Of Karnataka on 26 February, 2010
Equivalent citations: 2011 (2) AIR KAR R 65
Author: Subhash B.Adi
Bench: Subhash B.Adi
. -- » A 4. _ AND;
W]? No.60804~805/2010
IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT DHARWAD
DATED THIS THE 26TH DAY OF FEBRUARY;
BEFORE C C
THE HONBLE MRJUSTICE A
WRIT PETITION No.6o8G4{L:~SQ5/"2'oIQ
BETWEEN: C C
1. VYAVASAYA SEVA SAHAKARI {,BAI\"1'I<:,"I;I*I3. _
HIREKOPPA t
REP BY ITS CH-AIRM;fII~?'»~.:" " 1 I
SR1 SANKANP;G;C}UDI4_\ MAI.I.;LANAGOUHD_A
KANNAPPAGOEJDAE. 'AGE 60_.'{E.ARS
occ AGRIL R /A'T"-H1RE':<:To?PA VILLAGE
NARGUNETQ IGADAG DIST _ 3
2. KHA1NAPI.IR'+GA.NGAPIJI'é- WAVASAYA
SEVA SA.HAK_ARI ~EAN_K--I,,Tp
KHANAPUR I _ A' _ _ '
REP BY ITS CHAIRMAN
SRI M_ALLAi'€AGOUDA HANUMANTHAGOUDA
. " '_?.'f*EEMMANAGOUD_AR, AGE 61 YEARS
_0*Cc*=AGRI.I., R /AT KHANAPUR VILLAGE
I 'IIARGUND TQ GADAG DIST. ...PETITIONERS
(}E§Y SE.I'.JA&*AI<UIv:AR S.PATIL, SR.ADv FOR
SR__I.F§:';PA'H'IL, ADV)
1: _ -'_1fHi.C'. STATE OF KARNATAKA
REP BY SPECIAL OFFICER/JOINT SECRETARY
DEPT. OF COOPERATION
" M S BUILDING
WP No.60804--805/ 20 10
BANGALORE 1
2. THE RETURNING OFFICER
TO CONDUCT ELECTIONS TO THE
TALUK AGRICULTURAL PRODUCE
MARKETING SOCIETY NARGUND
NARGUND TQ
GADAG DIST I
3. THE TALUK AGRICULTURAL A I. . _
PRODUCE MARKETING SOCIETY NARGIIND
REP BY ITS MANAGER " . -
NARGUND
NARAGUND TQ
GADAG DIST
4. VYAVASAYA SEVA SA-HAI<ARI~ E'ANI<'_LTD.',
BHAIRANHATTI,';-. _
REP. BY IT;<3_PR§ESIDEN'1'.'
SR1.VIRUPAI<SHAP_PA"---.jjj---_ _
S /O LAXiV$APP§$ML7N;A.N'i{OP
AGEI:5:2I'YEARS,'*R;*O"BH-AIRA'NA'I"rI,
TQ:NARGUN1), ..DIST:GAD_AG..'
' I ...RESPONDENTS
(BY SRLM.ITE:-SHIXVIXREDDNZTAGA ROR R1 AND 2,
SRi;V.D.KAM.AR'EDDY, ADV FOR R3,
SP:I.S_.NI.I<ALwAD;___EOR R4)
A A If~THI--S4"PE:IITI_ON IS FILED UNDER ARTICLES 226 AND
2271OE.TIIE~..,CO'NSTITUTION OF' INDIA PRAYING TO QUASH
THE'II/IPDGNEjD'NOTIFICATION DTD.8/2/2010 BEARING NO.
'CO28 CI':.-M2010 ISSUED BY RES.NO.1 VIDE ANNEXURE-E
AND ETC;
PETITION COMING ON FOR ORDERS, THIS DAY,
COURT MADE THE FOLLOWING:
WP No.6080-4-805/2010
ORDER
1. Sri.l\/l.KeshaVareddy, learned AGA takes_.§l_:lrioticei:
respondents 1 and 2.
2. This petition is directed against linotification \:l:a~ted'._ 08.02.1010 issued by respondelr1tr:vgll\'o.1 produced"vat°r§in'ne§lure-- it E.
3. The case of the petition_er.'i_ils: tr:'at¥';§etitioner is a C0- operative Society Lregis_ter_ed'; un¢i'e1~."~ th.<f provisions of the Karnataka "1959, with approved bye-
laws {fora_:shor_t1 'the a committee of management consistingiofg 12 me.mb:e1-sf"---..?l"'rriembers are to be elected from "A" class category, Zlmembers are to be elected from "B" class categovry' and 3 .membe_rs" are ex--officio members. The period of tii.e'll1nanagemcr1't_'committee of the elected members is five years.._ The,peri;od of existing members has come to an end and i"~.«._election to the members of the committee of the management class and "B" class category has to be held before ..__b3l1.(l)lg3.201O in respect of 3"; respondent~»Society. $5 WP No.60804--805/20 10
4. In all, there are 19 Vyavasaya Sahakari Banks Egiinited who are "A" class members of the 3rd Under bye law No.22 (6)(2] of the Bye Laws, to "A" class members of the committee 3&1' 00 respondent, the members should hay'e__ the minimum of 200 quintals the' 3?" resp0ndent»~Society during the*lco=~operatiye' 'year; Section 29 (C) (5) of the Act conferspovifer Government to issue notificationpto relating to the transaction eftlie .fCo~ojp_erative Society upto monetary limit fixed by i_sI'iie.2oo6 was issued by the State Goyernrnent minimum qualification relating to transaction oi14°ll'i"A_':'i Aclvavssrnemibers to the extent of 1 lakh a year lat for a._periold'""o'fl 3 years. However to gain political take control over the State Cowoperative Marketingv. .i?'et1;eration which is an apex body of the 3rd r.espond"enti~ Society, the State Government issued another dated 08.02.2010 modifying the notification dated ll'..._l:l16ig%12.2006 and thereby exempting the primary level (:0- .r%& " a WP No.60804-805/20 10 operative societies namely "A" category members from the minimum qualification. Being aggrieved by the'-lsaid notification, the petitioners have filed this writ petition; 3 --1-
5. Sri.Jayakumar S.Pati1, learnedv-senior counse1':va_ppearin'g for the petitioner submitted that; Section confers power on the State Gov-ernment" to fix the"~-imiraimumll qualification relating to transactionlll:o"g1'*.?'}l*C{ _class 'member with a Cooperative Society to certain. it does not confer any power to"e;.<emp't' qzzlaliiieation. In this regard, he the minimum qualification'eariijérliiiiged transaction by the "A" class member of three years. However, instead of f1§iingithellininim"o.rr1 qualification, by Annexure-E the .,State ..{§ove1'nment'=has___eXempted from the requirement of ' ' Vmini'm1_,1n1_ quaiifi&:a_tion.
S 6. it fu.rth'e_rsubmitted that it is mandatory that each Co- . ._op,erative" Society to frame bye~laws as prescribed under Rule 5 ofrhe liarnataka Co-operative Societies Rules, wherein the Co- golpergative Society has to frame a bye law relating to the terms (C) is; , thgsuggii WP No.60804-805/20 E0 provisions of Section 29 (C) (5) of the Act, the notificationis not sustainable.
8. On the contrary, learned counsel -
submitted that, the State Governmentiiihas the Act to exempt a cowoperative.s_oci6£3'--.fro1n the,j.a.??,iic'ation' any provisions of the Act. In consoriance izvithi of Section 121 read with Section 29"'(e}I'j(5Vj';--.t.he goirernvment has exempted the Societies 'V =:'ec;uiVI*e_'rneI_1.t of minimum quaiification. In that this notification is; " that most of the co-
operative "the fiood situation in most of the area 7--have not .ifr?_ln:€~?<1iit:e€§3\ii Iriuch business to qualify to contest the election: these circumstances and in the . ,1arger.»interest of thevfarrners the notification has been issued. 'question that arises for consideration in this petition is:v..ii it "Whether the Government has power to issue notification to exempt the society from minimum qualification under .._hS.iection 29 (C) (5) of the Act?" A
-OK-_f' WP No.60804»805/20 10
10. Section 29 (C) (5) confers power on the State Government to fix the eligibility qualification for being appointed orVie1eict_ed as a member of the Committee of such co-operatiVei"s'ocieti:3{i. _ is in consonance with the same, the State Government. had issued notification at Annexure--C this notification is not in dispute even the pervert to iijssuefis. notification fixing the eligibility'uuquiaiification also not in dispute. However, what thegovernment can exempt the requirement to contest the election. Fact' gob-e'rn'meiithasfpower to prescribe qualification, it to not prescribe the minimum qualification 29 (c) (5) of the Act is not mandatorj" it in nature. Under the said provision. the go:r.ernment' may prescribe the qualification may meari-s=m'ay not. Viililhough word 'exemption' is used in the at Annexure-E. What is sought to be done is toV.rem_oi7e the requirement of minimum qualification «.._and perrfritpiiall the members of the societies i.e., in View of the fioiod. _situation as most of the societies could not transact much
-.._i:busi}ness during this period and if minimum qualification is WP N0.60804--805/2010 prescribed} it may prevent large number of members. from contesting the election and may defeat the very pu.rpo,se~.,_of holding election. If there is a power to qualification under the provisions of Section oifpvthie Act, it has also power not to prescriEoe.,'.:.iIinv useful to refer to the provisions' Sec'ti_oin 21 Clauses Act which reads as under?" a "21. Power to issue, addiyarnend, vary or rescind notifications, or¢1¢;si,i.;ii,1¢§ Where, by,'CenA._tra:lp a power to issue notificat'ion_s"orders., rules' oriibyvewlaws is conferred, then that power incli.iid_es,,Va,powe'r,_ exercisable in the iike manner and subject to' the lilée--Lisanct_io'n"Jand conditions (if any), to add to, amend, vary ..or' rescind any notification, orders, rules or ldyejlaws sdAissL.£ed." H iiiii M iv * i'0rder.s,'or Bye laws so issued.
In as7.muchu."as"the authority which has power to issue, to include' power to add, amend very or rescind notification, contesting the election by means of any bye iaw. W? NOJBOSO4-805/2010 :10:
11. Provisions of Section 29 (C){5)' of the Act is not mandatory power to be exercised by the government, this provision is directory in nature, government may issue c§r"'may 9 not issue notification. Further, in View of the provisioris' pr, Section 21 of the Generai Ciauses Act, the .poi'w.erftfo K V' includes power to not to issue ie, to exempt raiso.-:' -- v
12. In so far as bye laws are concer'-ned, no,d7m.i.bt'RuIe':'5 prescribes that every society registered under.t'hev':proyisions of the Act requires to franie"'bye_';1daws;" 5 deals with the nature of bye laws to be framed. regard to the quaiificationcvofithe be appointed or elected is concerned ju,*s'j:;g;{g/c;»c.g(s;,j'r;§ 'bye law for the said purpose could be ._ 'VIE Iegisiation requires the State
--~.GoVerriment to do "certain. things and that power having been "'._de£eVgated.V_toyit.,Viit__is for the State to prescribe and not for the Soci,:etyi'to'VfréX'me'g::.the bye law for the said purpose. Hence, the 'bye 'prescribing qualification which is covered u / s 29 ':{C)"(£Et}.y_of the Act, is unenforceable. in my view, it does not give right to the society to restrict any "A" class member from ?
r WP No.6080-4-805/2010 : 11 :
13. From Annexure~]?3, it is clear that] the State Government has exempted the societies from minimum qualification._vii's.--a~ vis has not prescribed the minimum qualification and .s'a_me _._is».
- v in consonance with the power conferred on it (45). I' do not find that there is any error in eXerc'ise"'«of'ipowerVV State Government nor there is_a_ny violation of,v--'pro'visioifzs"vof "'1 Section 29 (C) (5); However, far Vasidbeiction ii21 is Concerned, it may not dire(';t.I;y of" the present case.-
State Government ir1ivii_ss3.1i3ng t.he~ impugned Annexure--E. In the circumstances,' Vepetition isfdeVo_id« "of merits and liable to be dismissed. , --Accordi11gly,~it is "dismissed. ~Sri--;M.I{eshaiia1?eddy, AGA is permitted to file memo of appearahnce' within iiotir weeks.
Sc1/ 4 JUDGE