Karnataka High Court
The Proposed Dharwad District ... vs State Of Karnataka And Others on 21 August, 1992
Equivalent citations: AIR1993KANT117, 1992(3)KARLJ659, AIR 1993 KARNATAKA 117, (1992) 3 KANT LJ 659
ORDER
1. The petitioner seeks writ of mandamus to the respondents to process the application of the petitioner dt. 30th May, 1988 and grant certificate of registration to it, under the provisions of the Karnataka Co-operative Societies Act, 1959, ('Act' for short). The proposed co-operative society is to be a housing society, consisting of only ex-servicemen. At the time of filing the writ petition, it had 80 members and the members are mostly pensioners who had rendered military service and a few of them were also the widows of ex-armymen. The petitioners further state that the Government has granted some lands in Block No. 21/A and S.No. 28/2. They have paid considerable sum of money towards these lands. They have also deposited a sum of Rs. 86,000/- towards the share capital in K.C.C. Bank, Dharwad. The members of the proposed society intend to develop the lands by laying sites and distributing the same amongst the members. The society is proposed to be registered at Hubli. The petitioner filed his application seeking registration under Ss. 6 & 7 of the Act, on 30th May, 1988. There was no response. The petitioner persisted by sending reminders.
2. Annexure 'B' is the copy of a letter dt. 5-5-90 written by the Joint Registrar, Belgaum Division, Belgaum, addressed to the Registrar of the Co-operative Societies, Bangalore, in respect of the application filed by the petitioner seeking registration. In this it is stated that the policy of the Government in respect of the registration of housing societies is still under consideration of the Government and actually the joint registrar will have to obtain the approval of the superior authorities for registration. He seeks a clarification whether there is a bar against registration and if so, the same may be sent to him. Annexure 'C' dt. 31st Oct. 1991 is the endorsement sent to the petitioner by the Registrar of Cooperative Societies. It states that the Government has so far not clarified its policy regarding registration of the societies. Consequently, the registration of the petitioner could be considered after the clarification is obtained from the Government.
3. The registration of Co-operative Societies is provided under Chapter II of the Act. S. 4 states that the co-operative society which has its objects the promotion of the economic interests or general welfare of its members, or of the public, in accordance with co-operative principles, or a co-operative society established with the object of facilitating the operations of such a society, may be registered under this Act. Its proviso states that no co-operative society shall be registered if it is likely to be economically unsound, or the registration of which may have an adverse effect on development of the co-operative movement. Section 6 provides for the requirements to be complied with by the applicant while an application is filed for registration. Section 7 provides for registration which reads as follows :--
"(1) If the Registrar is satisfied -
(a) that the application complies with the provisions of this Act and the rules;
(b) that the objects of the proposed society are in accordance with S. 4;
(c) that the aims of the proposed society are not inconsistent with the principles of social justice;
(d) that the proposed bye-laws are not contrary to the provisions of this Act and the rules; and
(e) that the proposed society complies with the requirements of sound business and has reasonable chances of success;
the Registrar may register the co-operative society and its bye-laws."
There is nothing in the Act which states that a housing co-operative society shall not be registered or that it requires the special approval of the Government. Section 4 itself indicates the policy of the Act. So long as the object of the society is to promote the economic interest or general welfare of its members, etc. the society may be registered. Though S. 4 by its language indicates as if it is a discretionary matter, by the use of the word "may", it is now quite clear that if the requisite conditions are satisfied, the necessary consequences should normally follow. The word "may" by itself would not create a discretionary jurisdiction. While considering the application, the Registrar will have to be satisfied with the matters enumerated under S. 7. Again there is nothing in S. 7 which militates against the registration of a housing co-operative society. It is also not understandable as to how a housing co-operative society if registered would be against the development of the co-operative movement. In fact, formation of the co-operative societies may facilitate the housing activity. S. 7 nowhere provides that the Government shall have to formulate a particular policy in respect of any class of society which could be registered under the Act. S. 40, states that it shall be the duty of the State Government to encourage and promote the co-operative movement including encouragement of cooperative farming in the State.
4. Registration results in the incorporation of the society, it confers a legal status to the association formed by the members, formed to carry on a lawful activity. Registration under the Act, so long as the objects of the co-operative society are lawful and fall within S. 4, is the rule and refusal to register ought to be an exception. Formation of a co-operative society is bringing into existence the association of its members. Every citizen in this country has a fundamental right to form an association, as per Art. 19(1)(c) of the Constitution. Co-operative society certainly is one form of association. Development of land, formation of lay-out and putting construction thereon also certainly are lawful activities. Therefore, prima facie there can be no doubt that formation of a co-operative society for the purpose of house building activity for the benefit of its members cannot be in any way considered as opposed to public interest. In the circumstances, I am of the view that an applicant for registration of a housing society has the right to demand registration. Non-registration will be an exception, under circumstances strictly falling within the matters enumerated under S. 7 stated above. The statutory authorities under the Act cannot await clearance of any policy by the Government when there is no scope for the the enumeration of such a policy under the Act. Consequently, I am of the view that the petitioner prima facie is entitled to registration under the Act. An appropriate decision however, will have to be taken by the respondents. No decision has been taken after considering the matters enumerated under S. 7. In the circumstances, I direct the 2nd respondent to consider the application of the petitioner within four weeks from the date of receipt of this order and take an appropriate decision. Writ petition is allowed accordingly.
5. The learned Government Pleader is directed to file his memo of appearance within six weeks from today.
6. Petition allowed.