Legislative amendments to cooperative laws, ensuring deemed membership and equitable treatment among societies, upheld as valid under constitutional provisions, without infringing on court decisions.

1Cooperation among cooperatives is one of universally accepted cooperative principles. (See Karve Commission on Cooperative Principles - Report unanimously adopted in the Vienna Cooperative Congress in 1966). The statutory scheme and scope of cooperation between the District Cooperative Bank and the Primary Cooperative Societies in the respective revenue district, under the Kerala Cooperative Societies Act, 1969 is the subject matter of dispute in these cases.

2Constitutional validity of the Kerala Cooperative Societies (Amendment) Act, 2002 (Act 3 of 2002), hereinafter called the Amendment Act is the challenge in these Original Petitions. The petitions were originally filed at a time the Kerala Cooperative Societies (Amendment) Ordinance, 2002 (6 of 2002) was promulgated. The Ordinance came into effect from 4.5.2002, and the Act is given retrospective effect from that date. The impugned amendments pertain to (1) restoration of the status of District Cooperative Banks with membership open to any type of primary societies and federal and central societies having head quarters in the respective districts, as it stood prior to Act 15 of 1997; (2) the consequential amendment on the cessation of nominal or associate members in the case of primary societies; (3) the concept of active membership introduced as per Act 1 of 2000 with effect from 1.1.2000 being dropped; (4) deemed membership given to primary societies which had ceased to be members on the commencement of Act 15 of 1997 and provision for application for membership in the case of nominal or associate members enrolled after 3.6.1997; (5) cessation of the Committee in office of the District Cooperative Banks with effect from 4.5.2002.

3The main arguments advanced by the petitioners :
 (1) The amendment is ultra vires the Constitution of India, infracting Art.14 and 19(l)(c) and (g).
 (2) The legislation takes away the benefit of the judgment of this Court in O.P. 29277/2001 and connected cases and the judgments following the said Division Bench judgment wherein the Court declared that the Committee of the respective District Cooperative Banks will be entitled to continue for a term of 5 years.
 (3) Even after changing the definition of District Cooperative Bank, it was not necessary to dethrone the existing committee before its term; instead the existing committees could have been requested to constitute new committees on the basis of the amended provision. It was also contended that the said provision under S.7(l)(c) of the Amendment Act does not find a slot in the parent Act and therefore, cannot be treated as part of Amendment Act.
 (4) The concept of active membership having been introduced with a purpose, it should not have been dropped, atleast without experimenting it for some time.
 (5) Deemed membership is against the very concept of membership which is to be granted only on application. That is a function of the respective society and the legislature is incompetent to provide deemed membership.

4District Cooperative Bank - its statutory position and purposes : Promotion of Cooperative movement is prescribed as a Directive Principle of State Policy under Art.43 of the Constitution of India. The purpose of the Kerala Cooperative Societies Act, 1969, hereinafter called the KCS Act as set out in the preamble is to provide for the orderly development of the cooperative sector in the State by organising the cooperative societies as self governing democratic institutions to achieve the objects of equity, social justice and economic development, as envisaged in the Directive Principles of State Policy of the Constitution of India. For such orderly development of the cooperative sector in the State, State partnership is an accepted principle in cooperative movement, ever since the report of the All India Rural Credit Survey Committee submitted in 1954, known as Gorwala Committee Report - named after its Chairman, Sri. A.D. Gorwala. At the apex level, the partnership was recommende