Case Note & Summary
The petitioners, directors of the Antarsante Primary Agricultural Co-operative Society, filed a writ petition under Articles 226 and 227 of the Constitution challenging a direction dated 29.11.2023 issued by the Assistant Registrar of Co-operative Societies under Section 12(5) of the Karnataka Co-operative Societies Act, 1959. That direction required the society to delete Bechanahalli Gram Panchayat from its area of operation within 15 days to facilitate the formation of a new Primary Agricultural Credit Society in that gram panchayat. The society was registered under the KCS Act and operated in several gram panchayats, carrying on the business of deposit acceptance, credit, and supply of agricultural inputs. The direction followed a 2017 circular by the Registrar of Co-operative Societies and a decision taken in a meeting on 03.08.2023 to form a new PACS. The society represented on 28.12.2023 seeking time to call a special general meeting, and villagers wrote on 29.12.2023 opposing the new PACS and the direction. The petitioners initially also sought a declaration that Section 12(5)(6) of the Act is ultra vires Articles 19(1)(g) and 43-B, but withdrew that prayer. The surviving prayers were to quash the direction and to permit the society to continue functioning with its existing area of operation. The petitioners argued that the direction was issued after an inordinate delay, would harm the society and its employees, and that the power under Section 12(5) does not extend to reducing the area of operation. They contended that the direction violated natural justice, infringed the society’s autonomy under Article 43-B, and that after deletion of Section 14A in 2013, any reorganization could only be voluntary under Section 14. The matter was heard and reserved on 03.04.2025, and the order was pronounced on 02.05.2025. The available text of the judgment does not contain the court’s analysis or final directions, leaving the outcome unknown.
Headnote
A) Co-operative Law - Administrative Directions - Section 12(5), Karnataka Co-operative Societies Act, 1959 - The petitioners challenged the Assistant Registrar's direction to delete Bechanahalli Gram Panchayat from the area of operation of a Primary Agricultural Credit Co-operative Society. The petitioners contended that Section 12(5) only permits directions regarding amendment of bye-laws and does not empower reduction of area of operation; that the direction was arbitrary, without authority, and violated the society’s autonomy under Article 43-B. The court’s decision is not included in the available excerpt (Paras 4-7.9).
B) Natural Justice - No Notice Before Direction - The petitioners argued that the impugned direction was issued without prior notice to the society, thereby violating principles of natural justice (Paras 7.6).
Issue of Consideration
Whether the direction issued under Section 12(5) of the Karnataka Co-operative Societies Act, 1959, to delete a gram panchayat from the society's area of operation is valid, whether it violates principles of natural justice, and whether it infringes upon the society's autonomy under Article 43-B of the Constitution.
Law Points
- scope of power under Section 12(5) of Karnataka Co-operative Societies Act
- 1959
- requirement of natural justice before altering area of operation
- autonomy of co-operative societies under Article 43-B of the Constitution
Case Details
2025 LawText (KAR) (05) 19
Writ Petition No. 1098 of 2024 (CS-RES)
Jayakumar S. Patil (Sr. Advocate) for Varun J. Patil (Petitioners), Yogesh D. Naik (AGA for Respondents 1-4), T.P. Rajendra Kumar Sungay (for R6), Sandesh T.B. (for R5), Deviprasad Shetty (for R7-R13)
Shivananja, Mahadevanayak, H. Sannegowda
State of Karnataka, Registrar of Co-operative Societies, Joint Registrar of Co-operative Societies, Assistant Registrar of Co-operative Societies, Antarsante Primary Agricultural Co-operative Society Ltd, and others
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Nature of Litigation
Writ petition under Articles 226 and 227 seeking quashing of direction to delete Gram Panchayat from society's area of operation and to permit society to continue with existing area
Remedy Sought
Petitioners sought to quash the direction dated 29.11.2023 issued by Assistant Registrar under Section 12(5) KCS Act, and to permit the society to function in its existing area of operation
Filing Reason
The Assistant Registrar directed the society to delete Bechanahalli Gram Panchayat from its area of operation within 15 days under Section 12(5) of KCS Act, which petitioners challenged as arbitrary, without authority, and in violation of natural justice and autonomy
Previous Decisions
No previous judicial decisions mentioned; the direction in question was passed administratively on 29.11.2023, with a representation dated 28.12.2023 and letter from villagers dated 29.12.2023, but not considered.
Issues
Whether the direction issued by the Assistant Registrar under Section 12(5) of the KCS Act to delete a Gram Panchayat from the society's area of operation is valid, legal, and within the scope of the provision.
Whether the principles of natural justice were violated as no notice was given before issuance of the direction.
Whether the direction infringes upon the autonomy of the co-operative society as guaranteed under Article 43-B of the Constitution.
Submissions/Arguments
The impugned direction dated 29.11.2023 was issued pursuant to a 2017 circular but the authorities kept quiet for seven years; therefore, issuing a direction now under Section 12(5) was impermissible.
Implementation of the direction would harm the society, its employees, and its area of operation, and cannot be pruned by an executive direction.
The petitioners have no objection to a new PACS being formed in Bechanahalli Gram Panchayat, but members should be allowed to resign and join only after settling dues.
Section 12(5) only permits directions regarding amendment of bye-laws to comply with the Act and Rules, not to reduce the area of operation; the direction is arbitrary and without legal authority.
Principles of natural justice were violated as no notice was given to the society before issuing the direction.
The direction breaches the autonomy of the co-operative society guaranteed under Article 43-B of the Constitution, especially after deletion of Section 14A which previously gave reorganization power.
Any division or reorganisation of a co-operative society can only be done voluntarily under Section 14 of the KCS Act, not through administrative directions.
Fragmentation of a co-operative society is not in the interest of the society and would adversely affect its working.
Judgment Excerpts
the Assistant Registrar ... issued a direction on 29.11.2023, under Sub-section (5) of Section 12 of the KCS Act directing the Society to delete Bechanahalli Gram Panchayat from its area of operation
There cannot be a direction to relinquish a grama panchayat from the area of operation by the ARCS, the same is arbitrary, unscientific, illegal, without authority of law.
Any division or reorganisation of Society can only be done voluntarily under Section 14 of the KCS Act. There cannot be administrative directions issued for such reorganisation or division.
Procedural History
The writ petition was filed under Articles 226 and 227. It was heard on 03.04.2025 and reserved for orders. The court pronounced the order on 02.05.2025. The petitioners sought to quash the ARCS direction dated 29.11.2023 and to permit the society to continue with its existing area of operation. The petitioners also originally sought a declaration that Section 12(5)(6) is ultra vires, but withdrew that prayer during hearing.
Acts & Sections
- Karnataka Co-operative Societies Act, 1959: 12(5), 12(5)(6), 14, 14A
- Constitution of India: 19(1)(g), 43-B, 226, 227
