Back
2012 Supreme(Kar) 875
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
Vikramajit Sen and B.V. Nagarathna, JJ.
Shiriyara Vyavasaya Sahakari Bank Niyamith H.O:- Saibarakatte, Post Shiriyara-576 210, Udupi Taluk and Dist. Rep by its Director, Sri. Kishan Hegde Kolkebail S/o. K.R. Hegde, Aged About 43 Years, R/o. Kolkebail House, Post Shiriyara-576 210. Udupi Taluk and District —Appellant
Vs.
State of Karnataka, Rep. by its secretary,Department of Co-Operation. M.S. Building, Vidhana Veedhi, Bangalore-560 001, The Registrar of Co-Operative Societies, No. 1, Ali Askar Road. Bangalore-560 052 and The South Canara District, Central Co-Op Bank Limited, Head Office, Sadashiva Sahakara Sadana, Kodialbail Mangalore-575 003. Rep. by its Managing Director —Respondent
Writ Appeal No. 15974 of 2011 and W.A.No. 15980 of 2011
Decided on : 14-02-2012
Advocate Appeared:
Mr. Ashok Haranahalli, Sri. Vijay Krishna Bhat, M., Sri. Ashok Haranahalli, Sri. Vijay Krishna Bhat, Sri. S.K. Acharya, for the Appellant
Mr. B. Veerappa, AGA, Sri. B. Veerappa, AGA, Sri. B. Veerappa, AGA, for the Respondent
The main legal point established is the deference to executive policy decisions and the interpretation of statutory provisions in the context of public interest and administrative necessity.
Headnote:
Co-operative Bank - Bifurcation of South Canara District Central Co-operative Bank - Karnataka Co-operative Societies Act, 1959, Section 14, Section 14A, Section 30B
Fact of the Case:
The appeals challenge the order dismissing writ petitions against the Government Order bifurcating the South Canara District Central Co-operative Bank. The provisions cited are Section 14, deleted Section 14A, and Section 30B of the Karnataka Co-operative Societies Act, 1959.
Finding of the Court:
The court found that the State Government's decision to bifurcate the bank was in the public interest and for better administration of the newly formed districts. The court interpreted the provisions of Section 14, 14A, and 30B and held that the decision did not require judicial review.
Issues: The issues involved the compliance with the provisions of the Karnataka Co-operative Societies Act, 1959, and the power of the State Government to issue directions for amalgamation and division of co-operative societies.
Ratio Decidendi: The court held that the decision to bifurcate the bank was within the public interest and the power of the State Government under Section 30B. The court also emphasized judicial restraint in interfering with executive policy decisions.
Final Decision: The appeals were dismissed, and no order as to costs was given.
Vikramajit Sen . CJ--These appeals assail the order dated 11.08.2011, passed by the learned Single Judge, dismissing several writ petitions challenging the Government Order dated 02.02.2009 bifurcating the South Canara District Central Co-operative Bank, which was/is one of the writ petitioners/appellants before us. It is contended by the learned Senior Counsel that the learned Single Judge has passed a very brief order and all the arguments raised have not been duly considered.
2. The provisions that have been cited before us are Section 14, the deleted Section 14A and Section 30B of the Karnataka Co-operative Societies Act, 1959. We reproduce these provisions for facility of reference:
14. Amalgamation, transfer of assets and liabilities and division of co-operative societies- (1) A co-operative society may, by a resolution passed by a two-thirds majority of he members present and voting at a general meeting of the society-
(a) divide itself into two or more co-operative societies: or
(b) transfer its assets and liabilities in whole or in part to any other co-operative society which by a like resolution agrees to such transfer.
(2) Any two or more co-operative societies may, by a resolution passed by a two-thirds majority of the members present and voting at a general meeting of each such society amalgamate themselves and form a new co-operative society.
(3) The resolution of a co-operative society under sub-section (1) or sub-section (2) shall contain all particulars of the transfer, division or amalgamation, as the case may be, and no such resolution shall have any effect unless approved by the Registrar;
(Provided that in the case of a co-operative bank, the Registrar shall not approve such resolution without the previous sanction in writing of the Reserve Bank.)
(4) When a co-operative society has passed any such resolution, and it has been approved by the Registrar, the co-operative society shall give notice thereof in writing to all its creditors and such members of the society as did not vote in favour of the resolution land, notwithstanding any bye-laws or contract to the contrary, any creditor or any member to whom such notice is given shall during the period of one month from the date of service of the notice upon him, have the option of withdrawing his hares deposits or loans, as the case may be.
(5) Any member or creditor who does not exercise his option within the period specified in sub-section (4) and every member who has voted in favour of the resolution shall be deemed to have assented to the proposals contained in the resolution.
(6) A resolution passed by a co-operative society under this section shall not make effect until either--
(a) the assent thereto of all the members and creditors has been, or deemed to have been, obtained under this section or;
(b) all claims of members and creditors who exercise the option referred to in sub-section (4) within the period specified therein, have been met in full.
(7) Where a resolution passed by a co-operative society under this section involves the transfer of any assets and liabilities, the resolution shall, notwithstanding anything contained in any law for the time being in force, be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.
14-A. POWER TO DIRECT AMALGAMATION, DIVISION AND RE-ORGANISATION IN PUBLIC INTEREST -
(1) Notwithstanding anything contained in this act or the rules made thereunder and the bye-laws of the Co-operative Societies concerned. Where the Registrar is satisfied that it is essential in public interest or in the interest of Co-operative Society that any two or more Co-operative Societies should be amalgamated to form a single Co-operative Society or any Co-operative should be divided or any Co-operative Society should be recognised, then the Registrar shall order the amalgamation, division or reorganisation of such Co-operative Societies.
Provided that in the case of a Co-operative Bank, no
