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2010 DIGILAW 252 (KAR)

Vyavasaya Seva Sahakari Bank Ltd. , Hirekoppa v. State of Karnataka

2010-02-26

SUBHASH B.ADI

body2010
JUDGMENT : Subhash B. Adi, J :- Sri M. Keshavareddy, learned Additional Government Advocate takes notice for respondents 1 and 2. 2. This petition is directed against the notification dated 08.02.2010 issued by respondent No.1 produced at Annexure-E. 3. The case of the petitioner is that, petitioner is a Co-operatives Society is registered under the provisions of the Karnataka Co-operative Societies Act, 1959, with approved bye-laws (for short 'the Act'). It has a committee of management consisting of 12 members. 7 members are to be elected from "A" class category, 2 members are to be elected from "B" class category and 3 members are ex-officio members. The period of the management committee of the elected members is five years. The period of existing members has come to an end and election to the members of the committee of the management from "A" class and "B" class category has to be held before 31.03.2010 in respect of 3rd respondent-Society. 4. In all, there are 19 Vyavasaya Sahakari Banks Limited who are "A" class members of the 3rd respondent-Society. Under Bye-law No.22 (6)(2) of the Bye Laws, to contest to the "A" class members of the committee of management for the 3rd respondent, the members should have at least transacted to the minimum of 200 quintals of agricultural produce with the 3rd respondent-Society during the co-operative year. Section 29 (C) (5) of the Act confers power on the State Government to issue notification to fix the minimum qualification relating to the transaction of the Cooperative Society upto monetary limit fixed by it. A notification dated 16.12.2006 was issued by the State Government fixing the minimum qualification relating to transaction of "A" class members to the extent of 1 lakh a year at least for a period of 3 years. However to gain political advantage and to take control over the State Co-operative Marketing Federation which is an apex body of the 3 respondent Society, the State Government issued another notification dated 08.02.2010 modifying the notification dated 16.12.2006 and thereby exempting the primary level co-operative societies namely "A" category members from the minimum qualification. Being aggrieved by the said notification, the petitioners have filed this writ petition. 5. Being aggrieved by the said notification, the petitioners have filed this writ petition. 5. Sri Jayakumar S. Patil, learned senior Counsel appearing for the petitioner submitted that, Section 29(C)(5) though confers power on the State Government to fix the minimum qualification relating to transaction of" A" class member with a Co-operative Society to certain monetary limit, but it does not confer any power to exempt the minimum qualification. In this regard, he submitted that by Annexure-C the minimum qualification earlier fixed was Rs. 1lakh transaction by the "A" class member per year for a period of three years. However, instead of fixing the minimum qualification, by Annexure-E the State Government has exempted from the requirement of minimum qualification. 6. He further submitted that it is mandatory that each Cooperative Society to frame bye-laws as prescribed under Rule 5 of the Karnataka Co-operative Societies Rules, wherein the Cooperative Society has to frame a bye law relating to the terms and conditions of admission, regarding the admission of member and their rights and liabilities. Bye law also provide for mode of appointment and removal of the committee and other officers, their duties and powers of the committee and such officer and their terms. These bye-laws are few amongst other bye-laws framed. In terms of Rule 5, the Society has framed bye-laws as per Annexure-B wherein bye-law No. 22.6(2) prescribes the qualification of "A" class member to contest for the election i.e., he has transacted minimum 200 quintals of agricultural produce with the 3rd respondent-Society in a co-operative year. If the Government does not prescribe any qualification, then the member is required to show he is qualified under the Society bye-laws. 7. He further submitted neither Section 29(C)(5) nor Section 121 confers power on the State Government to exempt from the requirement of minimum qualification and in view of the same, if the Government does not want to prescribe any qualification, the qualification prescribed under the bye-laws would prevail and only subject to the bye-law member can be qualified to contest. He submitted that in view of the provisions of Section 29 (C) (5) of the Act, the notification is not sustainable. 8. On the contrary, learned Counsel appearing for the State submitted that, the State Government has power under Section 121 of the Act to exempt a co-operative society from the application of any provisions of the Act. He submitted that in view of the provisions of Section 29 (C) (5) of the Act, the notification is not sustainable. 8. On the contrary, learned Counsel appearing for the State submitted that, the State Government has power under Section 121 of the Act to exempt a co-operative society from the application of any provisions of the Act. In consonance with the provisions of Section 121 read with Section 29 (C) (5), the government has exempted the Societies from the requirement of minimum qualification. In this regard, he further submitted that this notification is issued in view of the fact that most of the cooperative societies on account of the flood situation in most of the area have not transacted much business to qualify to contest the election. It is in these circumstances and in the larger interest of the farmers the notification has been issued. 9. The short question that arises for consideration in this petition is: "Whether the Government has power to issue notification to exempt the society from minimum qualification under Section 29 (C) (5) of the Act?". 10. Section 29(C)(5) confers power on" the State Government to fix the eligibility qualification for being appointed or elected as a member of the Committee of such co-operative society. It is in consonance with the same, the State Government had issued notification at Annexure-C dated 16.12.2006. Issue of this notification is not in dispute even the power to issue notification fixing the eligibility qualification is also not in dispute. However, what is disputed is whether the government can exempt the requirement eligibility qualification to contest the election. Fact that the government has power to prescribe qualification, it includes the power to not prescribe the minimum qualification. Section 29(C)(5) of the Act is not mandatory but it is directory in nature. Under the said provision the government may prescribe the qualification may also means may not. Though word 'exemption' is used in the impugned notification at Annexure E. What is sought to be done is to remove the requirement of minimum qualification and permit all the members of the societies i.e., in view of the flood situation as most of the societies could not transact much business during this period and if minimum qualification is prescribed it may prevent large number of members from contesting the election and may defeat the very purpose of holding election. If there is a power to prescribe minimum qualification under the provisions of Section 29(C)(5) of the Act, it has also power not to prescribe. In this regard, it is useful to refer to the provisions of Section 21 of the General Clauses Act which reads as under: "21. Power to issue, to include power to add amend very or rescind notifications, orders, rules or bye-law. Where, by any Central Act or Regulations a power to issue notifications orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add to, amend, vary or rescind any notification, orders, rules or bye-laws so issued." In as much as the authority which has power to issue, to include power to add, amend very or rescind notification, orders, or bye laws so issued. 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 or may not issue notification. Further, in view of the provisions of Section 21 of the General Clauses Act, the power to issue includes power to not to issue i.e., to exempt also. 12. In so far as bye laws are concerned, no doubt Rule 5 prescribes that every society registered under the provisions of the Act requires to frame bye laws Rule 5 deals with the nature of bye laws to be framed. When a field as regard to the qualification of the member eligible to be appointed or elected is concerned u/s 29(C)(5), no bye law for the said purpose could be framed. If the legislation requires the State Government to do certain things and that power having been delegated to it, it is for the State to prescribe and not for the Society to frame the bye law for the said purpose. Hence, the bye law if any prescribing qualification which is covered u/s 29 (C) (5) of the Act, is unenforceable. In my view, it does not give any right to the society to restrict any "A" class member from contesting the election by means of any bye law. 13. Hence, the bye law if any prescribing qualification which is covered u/s 29 (C) (5) of the Act, is unenforceable. In my view, it does not give any right to the society to restrict any "A" class member from contesting the election by means of any bye law. 13. From Annexure-E, it is clear that, the State Government has exempted the societies from minimum qualification vis-a.-vis has not prescribed the minimum qualification and same is in consonance with the power conferred on it U/S 29(C)(5). I do not find that there is any error in exercise of power by the State Government nor there is any violation of provisions of Section 29(C)(5). However, in so far as Section 121 is concerned, it may not directly apply to the facts of the present case. 14. Hence, I do not find any error in exercise of power by the State• Government in issuing the impugned Annexure-E. In the circumstances, petition is nevoid of merits and liable to be dismissed. Accordingly, it is dismissed. 15. Sri M. Keshavareddy, AGA is permitted to file memo of appearance within four weeks.