The Kerala Co-operative Societies Act amendments permit government-led amalgamation of co-operative banks, balancing legislative authority against fundamental rights amidst emergent legislative needs.

Headnote:(A) Kerala Co-operative Societies Act, 1969 - Sections 74H and 2(ia) - Constitutional validity of amendments by Ordinance No.6 of 2020 challenged on grounds of legislative competence and violation of rights under Articles 14, 19(1)(c), and 43B of the Constitution. Repeated re-promulgation of Ordinances is alleged to be a fraud on constitutional provisions. (Paras 1, 29, 49, 86)

(B) The amendment intends to streamline the cooperative sector, transitioning from a three-tier to a two-tier system for efficiency and better service delivery, defending against violations of cooperative principles and democratic control. (Paras 33, 76)

(C) Court addresses the need for timely legislative action amid pandemics affecting sessions. The government’s decision to re-promulgate the ordinance due to exceptional circumstances is upheld. The court finds no evidence of mala fide intent. (Paras 81, 86)

(D)

Result: Petitions challenging the amendment are dismissed, and directions are given for expediting the merger process. (Paras 88)

Table of Content
1. challenge to constitutional validity of amendment. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. background of co-operative society act and its principles. (Para 7 , 8 , 9 , 10)
3. expert committee recommendations for banking structure. (Para 13 , 14 , 15 , 19)
4. process of amalgamation and its implications. (Para 20 , 21 , 22 , 23)
5. arguments against the ordinance focusing on democratic control. (Para 29 , 30 , 31 , 39)
6. claims of infringement on fundamental rights. (Para 43 , 44 , 72)
7. constitutional basis for validity of re-promulgated ordinance. (Para 77 , 86)

1. The question which requires a resolution in these writ petitions concern the constitutional validity of the amendment brought in to S.74H(1)(a) and the proviso to sub section (2)(ia) by Ordinance No.6 of 2020 promulgated by the Governor of Kerala in exercise of powers conferred by clause No. (1) of Art.213 of the Constitution of India . The Ordinance is sought to be struck down on the ground that the introduction of the Ordinance is beyond the legislative competence of the State, arbitrary and unreasonable under Art.14, violative of the rights guaranteed to the petitioners under Art.19(1)(c) of the Constitution and the rights which are required to be protected under Art.43B of the and grossly at variance with the cooperative principles. Repeated re - promulgation of the ordinance without laying it before the Legislature is yet another ground on which the ordinance is sought to be invalidated.

2. While W. P. (C) Nos. 11753 of 2020 and 6639 of 2020 are filed by the Presidents of two Primary Co - operative Banks challenging the Ordinance on various grounds, W. P. (C) No. 21265 of 2020 is filed by the managing committee of the Malappuram District Co - operative Bank Ltd. seeking the very same relief.

3. W. P. (C) Nos. 20371 of 2020 and 33596 of 2019 are filed by various Primary Agricultural Credit Co - operative Societies supporting the amendment and also for directions to the Government to permit the petitioner banks to become members of the newly formed Kerala Co - operative Bank.

4. W. P. (C) No. 1916 of 2020 and 571 of 2020 are filed by the regular and permanent employees of the Malappuram District Co - operative bank seeking a direction to the Government to complete the process of merger of the 4th respondent bank with the Kerala State Co - operative Bank in terms of S.74H of Kerala Co - operative Societies Act as amended by Ordinance No.6 of 2020 and for incidental reliefs.

5. W. P. (C) No. 20400 of 2020 is filed by the Employees Federation of the Malappuram District Co - operative bank seeking to interdict the Board of Directors of the Malappuram District Co - operative Bank from taking any policy decision on the affairs of the 3rd respondent till the merger of the 3rd respondent bank is complete in terms of Ext.P4 Ordinance as duly re - promulgated.

6. W. P. (C) No. 4882 of 2021 is filed by the Managing Committee of the Malappuram District Co - operative Bank seeking for a declaration that the Kerala Co - operative Societies Amendment Ordinances from Ordinance No.6/2020 to Ordinance No. 24/2021 is a colourable exercise of power and therefore bad in law and also for holding that the recommendation for re - issuance of Ordinance No.24 of 2021 by the Council of Ministers is by abusing the Constitutional Powers conferred on the State under Art.213 of the Constitution of India .

7. As the issues raised are interrelated, all these cases were heard together and are being disposed of by this common judgment. Except where otherwise indicated, for the sake of convenience and clarity, reference shall be to the facts and Exhibits in W. P. (C) No. 6639 of 2020, treating the same as the leading case. The determination of issues in the leading writ petition would in effect resolve the issues raised in the other writ petitions.

8. Before proceeding to discuss the respective contentions advanced by both the opposing sides, it would be apposite to delineate the sequence of e

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