IMPORTANT POINT
The right to form a co-operative society encompasses the right to manage its employees, and any law infringing this right is unconstitutional.

ORDER :

1. Section 128A of the Karnataka Co-operative Societies Act, 1959 (for short ‘Act of 1959’) has a weird history to tell. It successfully withstood the challenge to its constitutional validity in 1986. However, the said provision is omitted vide Ordinance No. 8 of 2009. On 29.03.2010, provision (re-numbered as 128-A) makes a comeback. And on 01.07.2020, said provision is once again omitted. On 27.07.2023, Section 128-A again finds its place in the Act of 1959, vide Act No. 27/2023.

2. But for a hyphen between ‘128’ and ‘A’, the provision is a replica of Section 128A, which has been declared ‘intra vires’ in PCLD Bank Vs. State of Karnataka, ILR 1986 Karnataka 427. However, in this batch of petitions, the provision once again faces the challenge to its constitutional validity.

3. Some of the petitioners are the Primary Co-operative Societies registered under the Act of 1959, others are the members or office bearers of the Primary co-operative societies.

4. Quite obviously, the State and the interveners (Federal Societies) have raised the following preliminary objections to the maintainability of the Writ Petitions.

(a) The identical provision (Section 128-A) as it stood in 1986, is held to be constitutional by the Division Bench in PCLD Bank, supra. Thus, the principle of res judicata applies, as such the Writ Petitions are not maintainable.

(b) The Writ Petitions are premature; there is no cause of action as the Registrar of co-operative societies (‘Registrar’ for short) has not implemented the Regulations under Section 128-A of the Act of 1959. The right to challenge will accrue only in case, the Regulations violate the fundamental rights of the members of the Society.

5. Section 128-A of the Act of 1959 was introduced by way of amendment vide Act No. 27/2023. The amended provision reads as under:

“128-A. Constitution of a common cadre:

1. Notwithstanding anything contained in this Act, the rules or the bye-laws, where the Registrar, in the interest of the co-operative movement, considers that the creation of a common cadre of employees for any class of co- operative societies is necessary, he shall authorize one or more federal societies to which such class of co-operative societies is affiliated to exercise the power of appointment, transfer and disciplinary action in respect of such categories of employees of that class of co-operative societies as may be specified by him and make such regulations as may be necessary for carrying out the said purpose. Where such federal society is so authorised by the Registrar, the affiliated co- operative societies shall not have powers to deal with such categories of employees except to the extent the regulations may permit.

2. The Registrar shall have the power to require the affiliated co-operative societies to make contribution of such sum every year towards expenditure, as the federal society is likely to incur or has incurred for the purpose. If any co- operative society fails to pay the said sum to such authority as may be specified by the Registrar and within the time fixed by him, the Registrar may on the application of the authority, and after such enquiry as he may consider necessary, make an order requiring the co-operative society to pay the amount, and every such order shall be enforceable against the co-operative society as if it were an award under Section 71.”

6. The 97th amendment to the Constitution of India, came into effect on 15.02.2012. The relevant amendments for the discussion in these petitions are the amendment to Article 19(1)(c) and the introduction of Article 43-B.

7. On the plea of res judicata. The plea of res judicata is not available. It is indeed true that the constitutional validity of Section 128-A was upheld by the Division Bench of this Court, in 1986, in PCLD Bank supra. Said provision was omitted later, and re-introduced in 2023. However, significant developments have taken place since the validity of the said provision was upheld in 1986.

8. The 97th a