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2014 Supreme(Kar) 315

High Court of Karnataka
D.H. WAGHELA, DILIP B BHOSALE & B.V. NAGARATHNA, JJ.
The Hassan Co-Operative Milk Producers Societies Union Limited & Others
Versus
State of Karnataka & Others
W.A.No.734 of 2014 c/w W.A.Nos.780-784, 792-796, 797-806, 808-315, 851, 866 of 2014 (CS-EL/M)
Decided on : 30-04-2014

Advocates appeared:
For the Appearing Parties:Jayakumar S Patil, Sr. Adv a/w Varun Kumar For M/s. Jayakumar S Patil Associates, A. Mahammed Tahir, Ravivarma Kumar, AG, a/w A.S. Ponnanna, Prl Govt Advocate, M. Keshavareddy, Dayanand S Patil, M. Ravindranath, Ramachandra R. Naik, Devi Prasad Shetty, M.S Kumar & Kumar, S.K. Acharya, Chandrashekar Acharya, Advocates.

Headnote:KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959 - Sections 28-A(4), 28-B & 39-A (as amended by Act 3 of 2013): [D.H. Waghela, C.J, D.B. Bhosale & B.V. Nagarathna, JJ] Applicability - Retrospectivity - Held, Having regard to the language employed in the Amending Act No. 3 of 2013 and the Act of 2011 (97th Amendment to the Constitution) by necessary implication /intendment the amended provision would operate retrospectively and as a result thereof, term of all the boards shall stand extended till expiry of the period of five years from the date of their election.

        The substitution, by the amending Act No. 3 of 2013, had the effect of just deleting the old provisions and making the new provisions operative as if the same were in existence from inception. It is well settled that the process of substitution consists of two steps, first, the old Rule is made to cease to exist and, next, new rule is brought into existence in its place. In view of this principle, all the substituted provisions introduced by way of Amending Act No. 3 of 2013, have retrospective operation. Thus, the rule against retrospectivity is not applicable when an amendment is made to a provision by way of substitution. Considering that the elected members of the Managing Committee do not have any substantive/vested right and their term is governed by the provisions, in particular, the amended sub-sec (4) of Section 28-A of the Act, shall continue till the expiry of the period of five years from the date of their election. [Shankarappa Mallappa Kelageri & ors., vs Co-operative Election Commission, Karnataka State & ors., 2014 (2) AIR Kar R 529, Overruled].

Judgment :

Dilip B Bhosale, J.

1. The order of reference dated 20th March 2014, which has occasioned the constitution of this Full Bench, has been passed by a Division Bench, in Hassan Co-operative Milk Producers Societies Union Limited and others vs. State of Karnataka and Others, W.A.No,734/2014 in Writ Petition No. 10005/2014. The Division Bench in this case, having disagreed with the view taken by another Division Bench of this Court in Shankaiappa Mallappa Kelageri and others vs. The Co-operative Election Commission, Karnataka State and others, W.A.Nos.100076-80 & 100081-83/2014, formulated the following questions which consequently required determination by the Full Bench:

"i) Whether Section-28-A(4) of the Karnataka Cooperative Societies Act, 1959, as substituted by the amended Act dated 11.02.2013, is prospective or retrospective in nature?

ii) When the elections are to be conducted to a cooperative society by the second respondent -State Cooperative Societies Election Commission - and for any reason if the Election Commission fails to conduct the elections within the stipulated time, whether an Administrator can be appointed automatically under Section 28-A(S) of the Act? and

iii) Whether Section-28-A(4) is ultra vires?"

2. The appellant-Hassan Co-operative Milk Producers Societies Union Ltd., which is a 'Federal Society' as defined by Section 2(e-4) of the Karnataka Cooperative Societies Act, 1959 (for. short "the Act"), shall be hereinafter referred to as 'Hassan Milk Union for short. The judgment dated 31-01-2014, in Shankarappa Mallappa Kelagiri, vs. The Cooperative Election Commissioner, Karnataka in W.A.Nos.100076-80 & 100081-83/2014, shall be hereinafter referred to as the judgment in 'S.M. Kelagiri'.

3. Learned counsel appearing for the parties are ad idem that the third question formulated by the Division Bench does not arise for our consideration since none of the appellants/petitioners in this group of appeals challenged the validity of Section 28-A(4) of the Act.

4. In S M Kelagiri, the Division Bench, was considering the question whether the term of committee, which was elected on 12-6-2009 for five co-operative years would stand extended in view of the amendment of Section 28-A of the Act, in particular, sub-section (4) thereof, by the amending Act No.3 of 2013, whereby the words "five cooperative years" were substituted by the words "five years from the date of election". The Division Bench, in this case, has taken a view that it is a case of substitution which cannot be given effect to mechanically from the date of the statute itself. Then the Division Bench proceeded to observe that "even if the legislature amends the existing provision in a statute by way of substitution and the substituted provision comes into effect from the date of the Act, it is not an invariable rule". It was further observed that "in certain situations, the Court having regard to the purport and object sought to be achieved by the legislature may construe the word 'substitution' as an amendment having a prospective effect. If the amendment expressly states that the substituted provision shall come into force from the date of the amendment coming into force, the said provision is prospective in nature. Then, there is no scope for interpretation whether the said amendment is prospective or retrospective. The legislature had made its intentions clear by such express words, which is to be followed by the Courts. However, if such an express provision is not there in the amendment, it does not necessarily mean that it has to be retrospective in nature" The Division Bench then proceeded to observe that "to decide whether such an amendment in the absence of express words is prospective or retrospective in nature, the Court can look into the scheme of the amendment, the object sought to be achieved, the mischief sought to be prevented and they, by interpretative process, can declare whether the said amendment is prospective or retro










































































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