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2025 Supreme(Kar) 2124

IN THE HIGH COURT OF KARNATAKA AT DHARWAD
M.NAGAPRASANNA, J.
Hirekerur Taluk Agricultural Produce Co-Operative Marketing Society Ltd., Represented By Its President, Shivaling S. Patil – Petitioner
Versus
The State Of Karnataka, Represented By Its Secretary, Department Of Co-Operation and Ors. – Respondents
Writ Petition No. 103609 of 2024 (CS-RES)
Decided On : 04-12-2025

Advocates Appeared:
For the Petitioner: Sri. Sunil S. Desai, Adv.
For the Respondents:Smt. Girija S. Hiremath, HCGP, Sri. N.R. Kuppelur, Advocate.

The Registrar lacks authority to delete areas from existing co-operative societies to facilitate new establishments, emphasizing that PACSs can coexist in the same area under the Karnataka Co-operative Societies Act.

Headnote:(A) Karnataka Co-operative Societies Act, 1959 - Section 12(5) - Petition for quashing Registrar's direction on area of operation of co-operative societies - The court held that the Registrar cannot delete areas from existing societies to facilitate new ones. The Act does not mandate the establishment of a PACS in every Gram Panchayat, nor does it restrict multiple PACSs from operating in the same area. (Paras 15, 16 and 17)

(B) Co-operative societies - Rights and powers - The court reaffirmed that the democratic management of co-operative societies must be upheld in line with Article 43B of the Constitution, promoting competition and management autonomy. (Paragraph 17)

(C) Circulars vs. Statutory Provisions - The court clarified that circulars indicating desirability do not override statutory provisions and cannot limit the operational scope of societies. (Paragraphs 16, 16.1)

Facts of the case:
The petition challenged a Registrar's direction that aimed to delete the area of operation of an existing co-operative society to allow a new PACS in Bechanahalli Gram Panchayat, citing the conflicting desires of residents.

Findings of Court:
The direction was held as not supported by law and quashed, affirming continued operation of the existing society and allowing new society establishment without restrictions.

Issues: Whether the Registrar can delete areas of operation of existing societies to facilitate new societies and if there is a requirement for a PACS in each Gram Panchayat.

Ratio Decidendi: The court determined that such directions by the Registrar are not permissible under the KCS Act and reiterated the importance of maintaining independent operational areas for co-operative societies.

Result: Writ petition allowed; directions of the Registrar quashed.

ORDER :

M. NAGAPRASANNA, J.

1. The petitioner is before this Court seeking the following prayer:

A. “Issue a Writ in the nature of certiorari quashing the order bearing No.UNIHA/RSR/C.R-/2024-25 dated 29/05/2024 passed by the 3rd respondent vide Annexure-G, as illegal and void, in the interest of justice and equity.

B. Issue any other writ/order/directions as may be deemed proper.”

2. Heard Sri.Sunil S. Desai, learned counsel for the petitioner, Smt.Girija S. Hiremath, learned HCGP for respondent NOs.1 to 3 and Sri.N.R.Kuppelur, learned counsel for the respondent Nos.4 and 5.

3. Learned counsel appearing for the petitioner submits that the issue in the lis stands completely answered by the order rendered by the Co-ordinate Bench in W.P. No.1098/2024, disposed of on 02.05.2025. The Co-ordinate Bench has held as follows:

13. “The points that would arise for consideration are;

1. Whether by direction issued under sub-section (5) of Section 12 of the KCS Act the area of operation of an existing society can be directed to be deleted to facilitate the establishment of a new society?

2. Whether there is a mandate for establishment of a PACS in each gram panchayat and whether there is an embargo on two or more PACS operating in the same area?

3. Whether in the present case grounds have been made out for interference with the directions issued by the Registrar?

4. What order?

14. I answer above points as under;

15. Answer to point No.1: Whether by direction issued under sub-section (5) of Section 12 of the KCS Act the area of operation of an existing society can be directed to be deleted to facilitate the establishment of a new society?

15.1 In terms of the facts stated above, it is clear that Respondent No.5-Antarasanthe Primary Agriculture Co- operative Society Limited operates under five gram panchayats, one of them being Bechanahalli Gram Panchayat. The residents of Bechanahalli Gram Panchayat wanting to establish a PACS in Bechanahalli Gram Panchayat contend that they are unable to do so on account of Respondent No.5 having Bechanahalli as its area of operation. It is for that reason that the said residents and promoters of a PACS, to be established in Bechanahalli had approached the Registrar to delete Bechanahalli Gram Panchayat from the area of operation of Respondent No.5. In pursuance of which the Registrar issued direction under Sub-section (5) of Section 12 of the KCS Act calling upon Respondent No.5 to delete Bechanahalli Gram Panchayat from its area of operation.

15.2 These being the facts, the legality or otherwise has been brought in question in the present petition. Sub-section (5) of Section 12 is reproduced hereunder for easy reference;

12. Amendment of bye-laws of a co-operative society. (5) If it appears to the Registrar that any amendment of the bye-laws of a Co-operative Society is necessary or desirable in the interest of such Society or to give effect to the provisions of the Act made thereunder, the Registrar may, by order, may direct the Co-operative Society, to make the Amendment proposed by him in such manner as may be prescribed and within such time as he may specify.

15.3 A perusal of the above provision would indicate that if it appears to a registrar that an amendment of the byelaws of a co-operative Society is necessary or desirable to give effect to the provisions of the Act, the Registrar by order can direct the Co-operative Society to make Amendment proposed by him in such manner as may be prescribed and within such time as he may specify.

15.4 Thus, the Amendment under Sub-section (5) of Section 12 is not a voluntary amendment of the Society but is one which is directed by the Registrar for the Society to be carried out, if the Registrar were of the opinion that it was necessary or desirable to give effect to the provisions of the Act. Thus, any direction under Sub- section (5) of Section 12 would have to be to give effect to the provisions of the Act.

15.5 The submission of Sri.T.P.Rajendra Kumar Sungay and Sri.Yoge

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