Non-compliance with statutory notice requirements under Section 14(4) of the Karnataka Co-operative Societies Act is an irregularity, not a fatal flaw, allowing bifurcation to proceed.

ORDER :

C.M. Poonacha, J.

The present petitions are filed to quash/set aside the order bearing No.JRB/RGN/Vibhajana/45/2014-15, dated 5.1.2015 passed by the second respondent - Joint Registrar of Cooperative Societies.

2. The relevant facts necessary for consideration of the present petitions are that, a society by name "The Aircraft Co operative Society Limited" (hereinafter referred to as 'the Society/Parent Society') was registered under the Mysore Co-operative Societies Act, 1948, on 4.2.1954 and the employees and officers working at the Hindustan Aircrafts Limited (HAL) were its members.

3. The petitioners in the writ petitions are the members of the Society. It is the case of the petitioners that initially the Society was to advance various types of loans to its members. Subsequently, the objects of the society were amended and housing activities were included in the byelaws vide amendment dated 18.12.1964. It is the further case of the petitioners that a proposal to bifurcate the society by splitting the objectives to be taken over and run by two independent Co-operative societies i.e., one for the credit facilities and another for the housing activities was made and in the Annual General Meeting (AGM) held on 14.9.2014, the said aspect i.e., bifurcating the society was listed as an agenda.

4. It is the contention of the petitioners that the said AGM held on 14.9.2014 was fraught with various illegalities. In the said meeting, a resolution was passed for bifurcation of the Society and two letters dated 12.11.2014 were addressed to the second respondent - Joint Registrar to approve the byelaws of the two bifurcated societies. Various information were sought, consequent to which by an order dated 5.1.2015 the second respondent approved the bifurcation of the society into 'The Aircraft Employees Credit Co-operative Society' (hereinafter referred to as 'the credit society') and 'The Aircraft Housing Co-operative Society (hereinafter referred to as 'the housing society') and administrators were appointed to the said societies. Being aggrieved by the said order dated 5.1.2015 the present writ petitions are filed.

5. Learned Senior Counsel, Sri. K.Suman and learned Counsel, Smt. Vidyulatha appearing for the petitioners contend that although there are various factual irregularities with regard to the manner in which AGM held on 14.9.2014 was conducted, as also the fact that the members of the parent society were not made known the agenda with regard to bifurcation, a primary contention put-forth on behalf of the petitioners is that the requirement under Section 14(4) of the Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as 'the Act') has not been followed inasmuch as the notice ought to have been issued by the parent society. However, in the present case the notice has been issued by the bifurcated societies. It is further contended that an omnibus order has been passed vide the order dated 05.01.2015 which could not have been passed having regard to the scope of Section 14(4) of the Act. It is further pointed on behalf of the petitioners that this Court by orders dated 27.3.2015 and 8.9.2015 passed in WP.No.12188/2015 had specifically ordered that the functioning of the bifurcated societies shall be subject to the result of the writ petition. It is also contended on behalf of the petitioners that the total number of members of the parent society are 13745 and as per Rule 14A(j)(5) of the Act, the quorum is 20% of 2749 members and that in the AGM held on 14.9.2014 only 1955 members attended the meeting. Hence, the said meeting did not have the requisite quorum. Hence, they seek for allowing of the writ petitions and setting aside of the order dated 5.1.2015.

6. Learned Senior Counsel, Sri. Jayakumar S.Patil appearing for respondent Nos.3 and 4 i.e., the bifurcated societies submits that although there is no strict compliance of the mandate as stipulated under Section 14(4) of the Act, in the ultimate analysis it i