[Cites 33, Cited by 0]
Karnataka High Court
Mohan S/O Narayan Nayak vs The State Of Karnataka on 15 December, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 02.12.2025
Pronounced on : 15.12.2025 R
IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
DATED THIS THE 15TH DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION NO. 107749 OF 2025 (CS -RES)
C/W
WRIT PETITION NO. 107758 OF 2025 (CS -RES)
WRIT PETITION NO. 107803 OF 2025 (CS - EL/M)
IN W.P.NO.107749/2025
BETWEEN:
MOHAN ,
S/O. NARAYAN NAYAK,
AGED ABOUT 61 YEARS,
OCC.: AGRICULTURE,
R/O. MAIN ROAD, GOKARNA,
P.O.GOKARNA, SUB DISTRICT: KUMTA,
DISTRICT UTTARA KANNADA - 581 326,
DELEGATE OF
MAHABALESHWARA CO-OP. BANK, LTD.,
GOKARNA, TALUKA: KUMTA,
DISTRICT UTTARA KANNADA - 581 326.
...PETITIONER
(BY SRI. G.R.GURUMATH, SENIOR COUNSEL FOR
SRI. MALLIKARJUNSWAMY HIREMATH, ADVOCATE)
2
AND:
1. THE STATE OF KARNATAKA,
REPRESENTED BY ITS
PRINCIPAL SECRETARY,
DEPARTMENT OF CO-OPERATION
M.S.BUILDING,
BENGALURU - 590 001.
2. THE CO-OPERATIVE ELECTION AUTHORITY,
REPRESENTED BY ITS COMMISSIONER,
TTMC BLOCK, SHANTI NAGAR,
BENGALURU - 590 027.
3. THE JOINT REGISTRAR OF
CO-OPERATIVE SOCIETIES,
BELAGAVI REGION, BELAGAVI
AND ELECTION OFFICER TO
ALL SECONDARY SOCIETIES AND
BELAGAVI REGION,
JAKKERI HONDA,
BELAGAVI - 590 001.
4. THE DEPUTY REGISTRAR OF
CO-OPERATIVE SOCITIES,
UTTARA KANNADA,
DISTRICT KARWAR - 581 342.
5. THE RETURNING OFFICER, DCC LTD.,
SIRSI,
UTTARA KANNADA - 581 412.
6. SHRI VENKATESHWARA VIVIDHODDESHA
SOUHARDA SAHAKARI SANGHA NIYAMIT,
SIRSI, S.S.ROAD,
AT POST: SIRSI, TALUKA: SIRSI,
DISTRICT UTTARA KANNADA - 581 402.
3
7. THE KANARA DCC BANK LTD SIRSI,
UTTARA KANNADA,
REPRESENTED BY ITS
MANAGING DIRECTOR,
SIRSI - 581 402.
...RESPONDENTS
(BY SMT. NANDINI SOMAPUR, AGA FOR R1 TO R5;
SRI. ARUN SHYAM, SENIOR ADVOCATE FOR
SRI. SOURABH HEGDE, ADVOCATE FOR R6;
SRI. VISHWANATH HEGDE, ADVOCATE FOR R7)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO A. ISSUE WRIT
IN THE NATURE OF CERTIORARI QUASHING THE IMPUGNED LIST
AS ANNEXURE- A SO FAR AS IS IT RELATES TO SERIAL NO.65,
DELEGATE FORM NO.297 IN RESPECT OF RESPONDENT NO.6 AND
ITS DELEGATE BE QUASHED AND ETC..
IN W.P.NO.107758/2025
BETWEEN:
TIMMAYYA,
S/O GANGADHAR HEGDE,
AGED ABOUT 44 YEARS,
OCC: AGRICULTURE,
R/O. ULLAL, POST: BISALKOPPA,
TALUK: SIRSI,
DISTRICT UTTARA KANNADA - 581 402,
DELEGATE OF CENTRAL CO-OP.
WHOLESALE STORES LTD.,
HOSMARUKATTE, SIRSI,
UTTARA KANNADA - 581 402.
...PETITIONER
(BY SRI. RAVIRAJ C. PATIL &
SRI MALLIKARJUNSWAMY HIREMATH, ADVOCATES)
4
AND:
1. THE STATE OF KARNATAKA,
REPRESENTED BY ITS
PRINCIPAL SECRETARY,
DEPARTMENT OF CO-OPERATION,
M.S.BUILDING,
BENGALURU - 560 001.
2. THE CO-OPERATIVE ELECTION AUTHORITY,
REPRESENTED BY ITS COMMISSIONER,
TTMC BLOCK, SHANTI NAGAR,
BENGALURU - 590 027.
3. THE JOINT REGISTRAR OF CO-OPERATIVE
SOCIETIES, BELAGAVI REGION,
BELAGAVI AND ELECTION OFFICER
TO ALL SECONDARY SOCIETIES,
AND BELAGAVI REGION ,
JAKKERI HONDA,
BELAGAVI - 590 001.
4. THE DEPUTY REGISTRAR OF
CO-OPERATIVE SOCITIES,
UTTARA KANNADA ,
DISTRICT KARWAR - 581 342.
5. THE RETURNING OFFICER, DCC LTD,
SIRSI, UTTARA KANNADA - 581 412.
6. KADAMBA MARKETING SOUHARD
SAHAKARI NIYAMIT, SIRSI,
NO.7, A.P.M.C. YARD, SIRSI,
POST: MARKET YARD, SIRSI,
UTTAR KANNADA - 581 402.
7. THE KANARA DCC BANK LTD., SIRSI,
UTTARA KANNADA,
REPRESENTED BY ITS
5
MANAGING DIRECTOR,
SIRSI - 581 402.
...RESPONDENTS
(BY SMT. NANDINI SOMAPUR, AGA FOR R1 TO R5;
SRI. ARUN SHYAM M., SENIOR ADVOCATE FOR
SRI. SOURABH HEGDE, ADVOCATE FOR R6;
SRI. VISHWANATH HEGDE, ADVOCATE FOR R7)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT
IN THE NATURE OF CERTIORARN QUASHING THE IMPUGNED LIST
AS ANNEXURE- A SO FAR AS IS IT RELATES TO SERIAL NO.18,
DELEGATE FORM NO.203 IN RESPECT OF RESPONDENT NO.6 AND
ITS DELEGATE BE QUASHED AND ETC.
IN W.P.NO.107803/2025
BETWEEN:
MANJUNATH,
S/O. KERIYAPPA NAIK,
AGED ABOUT 41 YEARS,
OCC: AGRICULTURE,
R/O: KANNE KOPPA, MANA MANE,
SIDDAPUR TALUKA,
UTTARA KANNADA - 581 355,
DELEGATE OF:
PRATHAMIK KRISHI PATTINA
SAHAKARI SANGHA NIYAMIT,
MANAMANE, AT POST: MANAMANE,
TALUKA: SIDDAPURA,
UTTARA KANNADA - 581 355,
SEVA SAHAKARI SANGHA NIYAMIT, MENASI,
AT POST VANALLI, TALUKA SIRSI,
UTTARA KANNADA - 581 336.
...PETITIONER
6
(BY SRI. G.R.GURUMATH, SENIOR ADVOCATE FOR
SRI. JOSHI SHRIPRASAD, ADVOCATES)
AND:
1. THE STATE OF KARNATAKA,
REPRESENTED BY ITS PRINCIPAL SECRETARY,
DEPARTMENT OF CO OPERATION,
M.S.BUILDING,
BENGALURU - 560 001.
2. THE CO-OPERATIVE ELECTION AUTHORITY,
REPRESENTED BY ITS COMMISSIONER,
TTMC BLOCK, SHANTI NAGAR,
BENGALURU - 560 027.
3. THE JOINT REGISTRAR OF
CO-OPERATIVE SOCIETIES,
BELAGAVI REGION, BELAGAVI AND
ELECTION OFFICER TO ALL SECONDARY
SOCIETIES AND BELAGAVI REGION,
JAKKERI HONDA,
BELAGAVI - 590 001.
4. THE DEPUTY REGISTRAR OF
CO-OPERATIVE SOCIETIES,
UTTARA KANNDA DISTRICT,
KARWAR - 581 342.
5. THE RETURNING OFFICER, DCC LTD.,
SIRSI, UTTARA KANNADA - 581 412.
6. CHANDRASHEKHAR,
S/O. NARAYAN HEGDE,
AGE: MAJOR, OCC: AGRICULTURE,
R/O: "TANGARAMANE",
AT POST: BALESARA ,
TALUKA: SIDDAPURA,
UTTARA KANNADA - 581 340,
7
DELEGATE OF:
SHRI MALLIKARJUN VYAVASAYA SEVA SAHAKARI
SANGHA NIYAMIT, BALESARA.
AT POST: BALESARA, TALUKA: SIDDAPURA,
UTTARA KANNADA - 581 340.
7. THE KANARA DCC BANK LTD.,
SIRSI, UTTARA KANNADA,
REPRESENTED BY ITS
MANAGING DIRECTOR,
SIRSI - 581 402.
...RESPONDENTS
(BY SMT. NANDINI SOMAPUR, AGA FOR R1, R3 TO R5;
SRI MALLIKARJUNSWAMY HIREMATH, ADVOCATE FOR
PROP. R8; R2 & R6 ARE SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT
IN THE NATURE OF CERTIORARI QUASHING THE IMPUGNED LIST
AS ANNEXURE-A SO FAR AS IS IT RELATES TO SERIAL NO.20
(DELEGATE FORM NO.060) IN RESPECT OF RESPONDENT NO.6 AND
ITS DELEGATE TO BE QUASHED AND ETC.
THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 02.12.2025, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
8
CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
Conglomeration of these writ petitions present a
singular yet recurring question touching upon the very heart
of cooperative democracy - namely, the legality of repeated
delegation for the purpose of voting in the elections of a
Federal Cooperative Institution. Though, the factual settings
in each petition vary in their contours, the legal fulcrum
upon which these petitions pivot remains common.
Therefore, I deem it appropriate to notice the facts in each of the
cases.
2. Shorn of unnecessary details, brief facts in each of the
cases are as follows:
2.1. In W.P.No.107749/2025, the petitioner is a Society,
represented by the delegatee in the subject petition. He becomes
the delegate to vote in the 7th respondent's ensuing elections. The
challenge is to the delegatee of the 6th respondent to cast his vote
in the elections of the 7th respondent-Kanara DCC Bank Ltd, Sirsi
9
[KDCC]. It is the allegation of the petitioner that the said delegatee
has already cast his vote as a delegatee in two other elections
hitherto held and therefore, this delegation would form the third in
line for the ensuing elections and therefore, there is a statutory bar
in appointing a delegatee of the 6th respondent for the third time for
an election.
2.2. In W.P.No.107758/2025, it is preferred by another
delegatee of Central Cooperative Wholesale Stores Limited again to
stop the 6th respondent from sending any delegate to vote in the 7th
respondent election. The legal grounds set out is the same that it is
the third time, the 6th respondent has delegated someone for the
purpose of voting in the 7th respondent.
2.3. In W.P.No.107803/2025, is now an admitted fact
that the 6th respondent is the delegatee of one Sangha which
admittedly is the third in line. Therefore, two of the petitions noted
hereinabove are contested and the law in regard to the third one is
already declared by this Court.
10
3. The petitions raise a challenge to the nomination of
delegates by certain cooperative societies to participate in elections
of the 7th respondent - Canara District Central Cooperative Bank
Limited. The grievance of the petitioners is that the 6th respondent,
under different statutory enactments has already exercised its right
of delegation on two prior occasions and that the present
nomination constitutes a third delegation, thereby infringing the
statutory embargo engrafted in Section 21 of the Karnataka State
Cooperative Societies Act, 1959. The petitions are by the
delegatee of Mahabaleshwara Cooperative Bank, calling in question
the delegation of the delegatee of the 6th respondent to stop him
from voting in the ensuing elections of the 7th respondent - Canara
District Central Cooperative Bank Limited.
4. Heard the respective learned counsels representing the
parties in each of these cases.
4.1. In W.P.No.107749/2025, heard Sri.G.R.Gurumath,
learned Senior Counsel for Sri.Mallikarjunswamy Hiremath, learned
counsel appearing for the petitioner, Smt.Nandini Somapur, learned
11
counsel appearing for respondent Nos.1 to 5, Sri. Gurudass Kannur,
learned Senior Counsel for Sri.Sourabh Hegde, learned counsel for
respondent No.6, Sri.Vishwanath Hegde, learned counsel for
respondent No.7.
4.2. In W.P.No.107758/2025, heard Sri.Raviraj C Patil,
learned counsel for Sri.Mallikarjunswamy Hiremath, learned counsel
appearing for the petitioner, Smt.Nandini Somapur, learned counsel
appearing for respondent Nos.1 to 5, Sri.Aruna Shyam, learned
Senior Counsel for Sri.Sourabh Hegde, learned counsel appearing
for respondent No.6, Si.Vishwanath Hegde, learned counsel for
respondent No.7.
4.3. In W.P.No.107803/2025, heard Sri.G.R.Gurumath,
learned Senior Counsel for Sri.Shripad J. Joshi, learned counsel
appearing for the petitioner, Smt.Nandini Somapur, learned counsel
appearing for respondent Nos.1, 3 to 5, Sri.Mallikarjunaswamy
Hiremath, learned counsel appearing for proposed respondent No.8.
12
SUBMISSIONS:
5. The learned Senior Counsel Sri. Gangadhar R Gurumath
appearing for the petitioner would vehemently contend that
statutory prohibition cannot be rendered otiose by the device of
altering nomenclature or invoking parallel enactments. According
to him, the essence of the bar lies not in the label affixed to the
cooperative entity, but in the character of the delegation itself. He
would submit, what cannot be done directly is sought to be done
indirectly by merely describing someone in a different name. This
cannot mean that delegation can be made more than two times as
there is a statutory bar under Section 21 of the Karnataka
Cooperative Societies Act, 1959. He would submit that the statutory
bar cannot be overridden by calling the societies in different names.
He would submit that delegation of the 6th respondent should be
set-aside for it being contrary to section 21. He would seek to place
reliance upon the judgments rendered by the learned Single Judge
which comes to be affirmed by the Division Bench to buttress his
submission that the bar of voting under Section 21 applies to any
Cooperative Society.
13
6. Per contra, two of the Senior counsels Sri.Gurudass
Kannur and Sri.Aruna Shyam would vehemently refute the
submissions by contending that Section 21 of the Karnataka
Cooperative Societies Act, 1959, is clear that he should not be a
delegatee under the Cooperative Societies Act. The delegation of
the 6th respondent has happened twice no doubt but not under the
Cooperative Societies Act. It is once under the Karnataka Souharda
Sahakari Act, 1997 and another time coming under the Multi-State
Cooperative Societies Act, 2002. It is for the first time, the
petitioner becomes a delegatee to vote in an election that is now
being held under the Karnataka State Cooperative Societies Act.
Both the learned Senior Counsels have placed reliance upon several
provisions of all the three enactments, all of which would bear
consideration in the course of the order.
7. I have given my anxious consideration to the
submissions made by the learned counsel appearing for the
respective parties and have perused the material on record.
14
8. The issue thus narrows itself to a question of statutory
interpretation, 'Whether delegations exercised under Cognate
Cooperative Enactments are to be aggregated for the
purpose of enacting bar under Section 21 of the Karnataka
Cooperative Societies Act, 1959?'
9. To resolve this controversy, it becomes necessary traverse
the statutory landscape governing cooperative institutions in the
State. The three enactments assume relevance. The Statutes are:
(1) The Karnataka Cooperative Societies Act, 1959,
(hereinafter referred to as 'KCS Act'), (2) The Karnataka
Souharda Sahakari Act, 1997 (hereinafter referred to as
'Souharda Act') and (3) The Multi-State Cooperative
Societies Act, 2002 (hereinafter referred to as the Multi-
State Act'). Certain provisions of all the three are germane to be
noticed.
9.1. KARNATAKA STATE COOPERATIVE SOCIETIES ACT,
1959:
"Section 2(c): "Co-operative Society" means a society
registered or deemed to be registered under this Act.
15
Section 2(f): "Member" means a person joining in the application
for the registration ofa co-operative society and a person
admitted to membership after such registration in
accordance with this Act, the rules and the bye-laws and
includes a nominal and an associate member.
Section (f-1): "Multipurpose Co-operative Society" means a
primary society the object of which is to provide various services
including services related to credit, business, industry and
consumer durables to its members.
Section 20(b):a co-operative society.-
(i) the [board] of which stands superseded or to which a
special officer is appointed under "[Section 31] of the Act.
(ii) which is "[ordered to be wound up] under Section 72;
(iii) which has not commenced working or has ceased to
work;
(iv) whose principal object is to advance loans and whose
percentage of recovery is.-
(a) less than fifty per cent of its total demand for the
Co-operative year immediately preceding the Co-operative year
during which the meeting or election is held; or
(b) which fails to pass on to the financing bank or the
credit agency, as the case may be, fifty per cent of the demand
or the entire portion of the recovered amount of the demand of
the financing bank or credit agency, whichever is higher, at
least fifteen days before the date of the general meeting or the
date of election, after a notice of not less than thirty days in this
regard has been issued to that society.]
Section 21: Manner of exercising vote.-
[(1) Every member, every representative,] every
delegate and every nominee shall exercise his vote in
person and not by proxy] [at a general meeting or an
election of the members of the [board] of a co-operative
society].
16
(2) Notwithstanding anything contained in sub-
section (1),-
(a) the [board] of a Co-operative Society which is a
member of another Co-operative Society may appoint one
of the members of the [board] to vote on its behalf in the
affairs of that other society:]
[Provided that where a new [board] has been
elected to a co-operative society, such newly elected
[board] shall send a delegate or nominee to any other co-
operative society where it is a member.]
[(b) where the Life Insurance Corporation of India, the State
Warehousing Corporation or such other institutions approved
by the State Government or a market committee or a local
authority or a firm [or a self-help group], a company or any
other body corporate constituted under any law for the time
being in force is a member of a co-operative society, a person
nominated by such institution, market committee or local
authority or a firm [or a self-help group], a company or any
other body corporate constituted under any law for the time
being in force, may vote on its behalf in the [general meeting
or the election of the members of the [board]] of the society.]
[(3) A member once nominated by the board of a Co-
operative Society under clause (a) of sub-section (2) to
vote on its behalf in any meeting of any other Co-
operative Society shall not be changed except by a
resolution passed with substantial reasons in a Board
meeting by a two-third majority of the members present
and voting in such meeting. However a Co-operative
Society shall not nominate or appoint any member of the
board to vote on behalf of it in more than two co-
operative societies.]
Section 98-H: Freedom for affiliation or disaffiliation with a
federal society.-(1) A Co-operative Credit Structure society
registered under the Karnataka Co-operative Societies Act, 1959
shall be eligible to become a member of a Federal co-operative
or a Secondary co-operative registered under the provisions of
Karnataka Souharda Sahakari Act, 1997.
17
(2) A co-operative registered under the Karnataka
Souharda Sahakari Act, 1997 may become the member of a
Federal society or a Secondary society registered under the
Karnataka Co-operative Societies Act, 1959.
(3) A co-operative society under the Co-operative Credit
Structure shall be at liberty to affiliate or disaffiliate with any
Federal society or a Secondary society of its choice keeping in
view the financial position of the Federal society or the
Secondary society:
Provided that a resolution approving such affiliation or
disaffiliation with a Federal society or a Secondary society shall
be passed in the annual general meeting held for the purpose
with three-fourths majority of the total members:
Provided further that before disaffiliation, the society shall
discharge its financial liability, if any, to the society from whom
it is disaffiliating.
Section 98-I: Restriction regarding area of operation.-
A co-operative society under Co-operative Credit Structure shall
have the freedom of entry and exit at any tier and there shall be
no mandatory restrictions of geographical boundaries for the
conduct of its business operations."
9.2. KARNATAKA SOUHARDA SAHAKARI ACT, 1997:
The objects and reasons for the promulgation of the subject
Act is as follows:
"An Act to provide for recognition, encouragement
and voluntary formation of co-operatives based on
self-help, mutual aid, wholly owned, managed and
controlled by members as accountable, competitive,
self-reliant and economic enterprises guided by
cooperative principles and matters connected
therewith.
18
Whereas it is expedient to provide for recognition,
encouragement and voluntary formation of co-
operatives based on self-help, mutual aid, wholly
owned, managed and controlled by members as
accountable, competitive, self-reliant and economic
enterprises guided by cooperative principles and for
matters connected therewith;"
2(e) "Co-operative" means a co-operative including
a cooperative bank doing the business of banking
registered or deemed to be registered under Section 5
and which has the words 'Souharda Sahakari' in its name
[and for the purposes of the Banking Regulation Act, 1949
(Central Act 10 of 1949), the Reserve Bank of India Act, 1934
(Central Act 2 of 1934), the Deposit Insurance and Credit
Guarantee Corporation Act, 1961 (Central Act 47 of 1961) and
the National Bank for Agriculture and Rural Development Act,
1981 (Central Act 67 of 1981)", it shall be deemed to be a Co-
operative society;]
9.3. THE MULTI-STATE CO-OPERATIVE SOCIETIES ACT,
2002:
"3. Definitions.--In this Act, unless the context
otherwise requires,--
... ... ...
(h) "co-operative society" means a society registered
or deemed to be registered under any law relating
to co-operative societies for the time being in force
in any State;
... ... ...
44. Prohibition to hold office of chairperson or
president or vice-chairperson or vice-president in certain
cases.--(1) No member of a board shall be eligible to be
elected as the chairperson or president or vice-chairperson or
vice-president of a multi-State co-operative society if such
19
member is a Minister in the Central Government or a State
Government.
(2) No member of a board shall be eligible to be elected
as the chairperson or president of a multi-State co-operative
society, after he has held the office, as such during two
consecutive terms, whether full or part:
Provided that a member who has ceased to hold the office
of the chairperson or president continuously for one full term
shall again be eligible for election to the office as such.
Explanation.--Where any member holding the office
of the chairperson or president at the commencement of
this Act is again elected to that office after such
commencement, he shall for the purpose of this section,
be deemed to have held office for one term before such
election."
(Emphasis supplied)
A holistic reading of the preamble, objects and definitional clauses
of the aforesaid enactments reveals an unmistakable legislative
intent to promote, nurture and sustain the cooperative movement,
as an instrument of collective economic empowerment. The
Souharda Act far from being a departure from cooperative
principles, is nothing but an alternative statutory vehicle to advance
the same ideals of mutual aid and self reliance. The Multi-State Act
again governs the cooperative societies beyond the jurisdictions of
20
the State, with the same avowed object of the cooperative
movement.
10. Section 21 of the Cooperative Societies Act embodies a
salutary principle, preventing concentration of electoral influence
and preserving the democratic fabric of cooperative governance.
The statutory interdiction is against nominating a delegate, to more
than two cooperative societies, which is intended to curb
monopolization of voting power. Therefore, the rigour of Section 21
of the Act mandates that a delegate cannot vote, on more than two
occasions, of a cooperative society, registered under the
Cooperative Societies Act.
11. If all the three delegations of the present delegate is to
the Societies registered under the Cooperative Societies Act, it
would have been a circumstance altogether different, while it is not.
The delegatee first, is delegated to vote in a society, coming under
the Souharda Act and the second time to a society coming under
the Multi-State Act, the third time now, to the Federal Cooperative
Society, the 7th respondent. These are admitted facts. Therefore,
21
the three delegations are to those societies coming under three
different enactments. The cooperative societies coming under the
Cooperative Societies Act, is distinct and separate, so are the
societies coming under the Souharda Act and the Multi-State Act.
Therefore, the delegation, the third in line, is in effect the first, to a
society under the Cooperative Societies Act.
12. Heavy reliance is placed upon the judgments rendered by
the learned Single Judge and the Division Bench. The learned
Single Judge in the case of SWABHIMANI SOUHARDA CREDIT
COPERATIVE LTD., V. GOVERNMENT OF INDIA1 has held as
follows:
"5. Having heard the learned counsel for the parties
and having perused the petition papers, this court is of
a considered opinion that the answer to the above
question needs to be in the affirmative for the
following reasons:
(a) Section 80P of the 1961 Act provides for
deduction in respect of income of co-operative
societies is obvious going by its very text; sub-section
(1) of said section reads as under:
"80P. (1) Where, in the case of an assessee
being a co-operative society, the gross total income
includes any income referred to in sub- section (2),
there shall be deducted, in accordance with and
1
2020 SCC OnLine Kar 5004
22
subject to the provisions of this section, the sums
specified in sub-section (2) in computing the total
income of the assessee."
The other provisions of this section being not of
much relevance to the question being treated, are not
reproduced, although they too have been looked into.
Section 2(19) which finds a place in the
definition clause of the 1961 Act reads as under:
"'co-operative society' means a co-operative society
registered under the Co-operative Societies Act, 1912 (2 of
1912), or under any other law for the time being in force in
any State for the registration of co-operative societies;"
The provisions of section 80P are enacted by
Parliament for promoting the co-operative movement in the
country in tune with what the Father of the nation Mahatma
Gandhi preached to the countrymen ; this section needs to
be liberally construed to effectuate the legislative object of
encouraging and promoting the growth of co-operative
movement vide Kanga and Palkhivala's The Law and Practice
of Income Tax, 10th Edition, LexixNexis at page 1656; it is
more so because the right to form a co-operative society
itself is made a fundamental right, now enshrined in article
19(1)(i) by virtue of 97th Amendment to the Constitution of
India with effect from October 15, 2013;
(b) the object of enacting section 80P of the 1961 Act
may be defeated if a restrictive meaning is assigned to the
definition of "co-operative society" as given under section
2(19) inasmuch as the invocability of the provisions of
section 80P is dependent upon the entity seeking the benefit
thereunder being a co-operative society ; going by the text
and context of these provisions, one can safely conclude that
all the entities that are registered under the enactments
relating to co-operative societies, regardless of their varying
nomenclatures need to be treated as co-operative societies;
this view accords with the purposive construction of section
80P read with section 2(19) of the 1961 Act;
23
(c) in the State of Karnataka, there have been two
statutes enacted by the State Legislature that relate to
registration and regulation of co-operative societies, viz., the
Karnataka Co-operative Societies Act, 1959, i.e., Karnataka
Act No.11 of 1959 and the Karnataka Souharda Sahakari Act,
1997, i.e., Karnataka Act No.17 of 2000 ; both these Acts
are enacted pursuant to article 246(3) read with Entry 32,
List-II of Schedule VII to the Constitution of India; there is
no other Entry to which this Act is relatable; the legislative
entries being only the fields of legislation need to be very
broadly interpreted, is the settled position of constitutional
jurisprudence vide Ujagar Prints v. Union of India (1989) 179
ITR 317 (SC) ; AIR 1989 SC 516 ; Chapter X of 1997 Act
containing section 67 enacts important co- operative
principles that animate and brood through almost all the
provisions of this Act ;
(d) the Karnataka Souharda Sahakari Bill, 1997 has
the following as the statement of objects and reasons:
"1. The recognition, encouragement and voluntary
formation of co-operatives based on self help, mutual aid,
wholly owned, managed and controlled by members as
accountable, competitive, self-reliant and economic
enterprises guided by co-operative principles specified
therein;
2. Removing all kinds of restrictions that have come to
clog the free-functioning of the co-operatives and the
controls and interference by the Government except
registration and cancellation;
3. Promotion of subsidiary organization, partnership
between co- operatives and also collaboration between co-
operatives and other institutions;
4. Registration of co-operatives, union co-operatives
and federal co-operative in furtherance of the objectives
specified above;
5. Conversion of co-operative societies registered
under the Karnataka Co-operative Societies Act, 1959 as a
co-operative under the proposed legislation. Hence the Bill."
24
(e) the preamble to the 1959 Act reads as under:
'Whereas it is expedient (to promote voluntary
formation, autonomous functioning, democratic control and
professional management of co-operative societies) in the
State of Karnataka ;
Be it enacted by the Karnataka State Legislature in the
tenth year of the Republic of India as follows.'
Similarly, the preamble to the 1997 Act reads as
follows:
'Whereas it is expedient to provide for recognition,
encouragement and voluntary formation of co-operatives
based on self-help, mutual aid, wholly owned, managed and
controlled by members as accountable, competitive, self-
reliant and economic enterprises guided by co-operative
principles and for matters connected therewith;
Be it enacted by the Karnataka State Legislature in the
forty- eighth year of Republic of India as follows.'
A perusal of these two preambles and the various
provisions of these two Acts leads one to an irresistible
conclusion that both these Acts are cognate statutes that
deal with co-operative societies, regardless of some
difference in their nomenclature and functionality, the
subject matter being the same;
(e) the word 'co-operative' is defined by section 2(d-2)
of 1959 Act as under:
'2(d-2) : "co-operative" means a Co-operative
registered under the Karnataka Souharda Sahakari Act, 1997
(Karnataka Act 17 of 2000), and includes the Union Co-
operative and the Federal Co-operative"
Similarly, the word 'co-operative' is defined by section
2(e) of 1997 Act as follows:
'2(e) : "co-operative" means a co-operative including
a co-operative bank doing the business of banking registered
25
or deemed to be registered under section 5 and which has
the words 'Souharda Sahakari' in its name (and for the
purposes of the Banking Regulation Act, 1949 (Central Act
10 of 1949), the Reserve Bank of India Act, 1934 (Central
Act 2 of 1934), the Deposit Insurance and Credit Guarantee
Corporation Act, 1961 (Central Act 47 of 1961) and the
National Bank for Agriculture and Rural Development Act,
1981 (Central Act 67 of 1981), it shall be deemed to be a co-
operative society'."
A close examination of these two definitions shows
that they have abundant proximity with each other in terms
of content and contours ; it hardly needs to be stated that in
both these definitions the word "co-operative" is employed
not as an adjective but as a noun ; the definition of other
relative concepts in the definition clauses of these Acts
strengthens this view ; this apart, section 7 of the 1997 Act
provides that the entity registered as a "co- operative" shall
be a body corporate, notwithstanding the conspicuous
absence of the word "society" as a postfix ; section 9 of the
1959 Act makes the entity once registered under section 8
thereof a body corporate ; both the entities have perpetual
succession by operation of law ; thus on registration be it
under the 1959 Act or the 1997 Act, a legal personality is
donned by them, so that inter alia they can own and possess
the property ;
(f) the employment of the word "sahakari" in the very
title of the 1997 Act is also not sans any significance ;
"sahakaar" in Sanskrit is the equivalent of "sahakaara" in
Kannada which means "co-operation" ; as already mentioned
above both the 1959 Act and the 1997 Act employ this
terminology; the 1997 Act is woven with the principles of co-
operation; section 4 of this Act bars registration of an entity
unless its main objects are to serve the interest of the
members in the area of co-operation and its bye-laws
provide for economic and social betterment of its members
through self-help and mutual aid in accordance with the co-
operative principles ; this apart, even sub-section (2) of
section 4 is heavily loaded with co-operative substance.
In the above circumstances, these writ petitions
succeed; a declaration is made to the effect that the entities
26
registered under the Karnataka Souharda Sahakari Act, 1997
fit into the definition of "co-operative society" as enacted in
section 2(19) of the Income-tax Act, 1961 and therefore
subject to all just exceptions, the petitioners are entitled to
stake their claim for the benefit of section 80P of the said Act
; a writ of certiorari issues quashing the impugned notice
dated March 30, 2018 at annexure D in W. P. No. 48414 of
2018 ; other legal consequences accordingly do follow.
It is needless to mention that the other provisions of
section 80P of 1961 Act and their effect on the claim of the
petitioner-like-societies have been left to be addressed by
the concerned authorities.
No costs."
(Emphasis supplied)
13. The Division Bench of this Court in the case of
GOVERNMENT OF INDIA V. KARNATAKA STATE SOUHARDA
FEDERAL COOPERATIVE LTD.,2 has held as follows:
"10. The relevant provisions of law are quoted here under for
ready reference:
Section 2[e] of the Souharda Act reads thus:
"2(e) "Co-operative" means a cooperative including a co-
operative bank doing the business of banking registered or
deemed to be registered under Section 5 and which has the
words 'Souharda Sahakari' in its name1[and for the purposes
of the Banking Regulation Act,1934 (Central Act 2 of 1934),
the Deposit Insurance and Credit Guarantee Corporation Act,
1961 (Central Act 47of 1961) and the National Bank for
Agriculture and Rural Development Act, 1981 (Central Act 67
of 1981)", it shall be deemed to be a cooperative society."
2
W.A.No.378/2020 (T-IT) and connected matters disposed on
20-12- 2021
27
Section 2[g] of the Souharda Act reads thus:
"2(g) "Co-operative Society" means a co-operative
society registered under the Karnataka Co-operative
Societies Act, 1959 (Karnataka Act 11 of 1959)"
Section 2[19] of the Income Tax Act reads thus:
"2(19). "co-operative society" means a co-operative
society registered under the Co-operative Societies
Act, 1912 (2 of 1912), or under any other law for the
time being in force in any State for the registration of
cooperative societies."
Section 80P of the Income Tax Act, 1961 reads thus:
"Deduction in respect of income of co-operative
societies.
80P. (1) Where, in the case of an assessee being a co-
operative society, the gross total income includes any
income referred to in sub-section (2), there shall be
deducted, in accordance with and subject to the provisions of
this section, the sums specified in sub-section (2), in
computing the total income of the assessee.
(2) The sums referred to in sub-section (1) shall be the
following, namely :--
Provided ...."
20. The objects and reasons for the amended Act
No.21/2004 [Souharda Act] reads as under:
"An Act to provide for recognition, encouragement and
voluntary formation of co-operatives based on self-help,
mutual aid, wholly owned, managed and controlled by
members as accountable, competitive, self-reliant and
economic enterprises guided by co-operative principles and
matters connected therewith;
Whereas it is expedient to provide for recognition,
encouragement and voluntary formation of co-operatives
based on selfhelp, mutual aid, wholly owned, managed and
28
controlled by members as accountable, competitive, self-
reliant and economic enterprises guided by co-operative
principles and for matters connected therewith."
21. Preamble to the Souharda Act reads thus: "Whereas it is
expedient to provide for recognition, encouragement and
voluntary formation of co-operatives based on self-help,
mutual aid, wholly owned, managed and controlled by
members as accountable, competitive, self-reliant and
economic enterprises guided by co-operative principles and
for matters connected therewith;
Be it enacted by the Karnataka State Legislature in the
Forty-eighth Year of Republic of India as follows-"
27. Merely, because separate definitions are provided
for the words "Co-operative" and "Co-operative
Society" under Section 2[e] and [g] respectively of
Sec.2 of Souharda Act, it cannot be construed as their
characteristic is different, since their nomenclature is
different. Importance has to be given to the word
"Cooperative" which is found in both the enactments
i.e., Act No.11 of 1959 and Act No.17 of 1997, as
adjective pre-fixed to the noun that means the
characteristic of the organization/institution while
applying the principle of hormonial construction and
interpretation of the laws, especially the laws which
are intended to promote the organization of that
character.
28. The Souharda Act and the Karnataka Cooperative
Societies Act, 1959 are both in force in the State of
Karnataka and are regulated by the State Registrar of
Co-operatives Karnataka. Registrar of Cooperative
Societies governs all Co-operatives while being
formed, alteration of bylaws and closure of the Co-
operative Societies. Though the aforesaid two Acts are
parallel but are in respect of Co-operatives in the State
as the name suggests.
29. It could be inferred that once the entities are
governed by the Co-operative Principles under the law
in force and registered under the State enactment,
29
which by implication or otherwise shall only have a
same meaning of Co-operative Society.
..... ..... .....
32. At this juncture, the arguments advanced by the
learned counsel for the Revenue that the Karnataka
Act No.35/2021 - the State Amendment Act runs contrary
to the Central enactment of Co-operative Societies Act, 1912
resulting in repugnancy with the Central enactment cannot
be countenanced for the reason that we are not adjudicating
upon the Constitutional validity of the Karnataka Act
No.35/2021, Amended Souharda Act. Hence, the amended
Section 2[e] of the Souharda Act is applicable to the facts of
the case. The judgments cited by the learned counsel for the
Revenue inasmuch as Articles 246 and 254 would be of no
assistance in adjudicating the dispute in the case on hand. If
a strict literal interpretation is given to the word 'Co-
operative' as canvassed by the learned counsel for the
Revenue, in the absence of rate of tax fixed for such 'Co-
operative', no tax liability would arise in the light of the
judgment of the Hon'ble Apex Court in the case of Govind
Saran Ganga Saran supra. Hence, the said arguments are
negated.
33. The provisions of Section 80P offers tax deduction
in respect of income of Co-operative Societies which is
enacted with a laudable object of promoting Co-
operating moment. Such benefit cannot be denied to
the so called Co-operatives under the Souharda Act
merely on hyper technicalities. The interpretation
given by the Revenue to Section 2[19] of the Act is
untenable. A harmonious reading of the said
provisions would indicate that Co-operative Society
registered under the Co-operative Societies Act, 1959
alone is not the Cooperative Society for the purposes
of the Income Tax Act, as the phrase 'or' employed
with the following words 'under any other law for the
time being in force in any State for the registration of
Co-operative Society' if read, Co-operative Societies
registered under the Souharda Act which is a State
enactment would certainly be construed as Co-
30
operative Society coming within the ambit of Section
2[19].
34. Thus, for the reasons aforesaid, we find no jurisdictional
error in the order passed by the learned Single Judge in
extending the benefit of Section 80P to the entities
registered under the Souharda Act."
(Emphasis supplied)
A perusal at the afore-quoted judgment of the learned Single
Judge and that of the Division Bench would not become
applicable to the facts of the case at hand, as the judgment does
not deal with delegation or interpretation of Section 21 of the
Act. The judgments deal with the interpretation for the purpose
of taxation qua Section 80P deductions. Therefore, the said
judgments relied on by the learned senior counsel
Sri Gangadhar R Gurumath for the petitioners, are inapplicable
to the facts of the case.
14. It is trite law that precedents must not be followed
without looking into the facts that went, into rendering the said
precedent. If the judgment of the learned single Judge and the
Division Bench is followed, without the present facts becoming
applicable, to the law as declared, it would run foul of the
31
judgment of the Apex Court in the case of HARYANA
FINANCIAL CORPORATION v. JAGDAMBA OIL MILLS3
wherein the Apex Court has held as follows:
"... ... ...
20. In Home Office v. Dorset Yacht Co. [(1970) 2 All
ER 294 : 1970 AC 1004 (HL)] Lord Reid said (at All ER p.
297g-h), "Lord Atkin's speech ... is not to be treated as if
it were a statutory definition. It will require qualification
in new circumstances". Megarry, J. in (1971) 1 WLR 1062
observed:"One must not, of course, construe even a
reserved judgment of even Russell, L.J. as if it were an
Act of Parliament." And, in Herrington v. British Railways
Board [(1972) 2 WLR 537 [sub nom British Railway
Board v. Herrington, (1972) 1 All ER 749 (HL)]] Lord
Morris said : (All ER p. 761c)
"There is always peril in treating the words of a
speech or a judgment as though they were words in a
legislative enactment, and it is to be remembered that
judicial utterances are made in the setting of the facts of a
particular case."
21. Circumstantial flexibility, one additional or
different fact may make a world of difference between
conclusions in two cases. Disposal of cases by blindly
placing reliance on a decision is not proper.
22. The following words of Hidayatullah, J. in the matter
of applying precedents have become locus classicus : (Abdul
Kayoom v. CIT [AIR 1962 SC 680] , AIR p. 688, para 19)
"19. ... Each case depends on its own facts and a close
similarity between one case and another is not enough
because even a single significant detail may alter the entire
aspect. In deciding such cases, one should avoid the
temptation to decide cases (as said by Cardozo) by
matching the colour of one case against the colour of
3
(2002) 3 SCC 496
32
another. To decide, therefore, on which side of the line a
case falls, the broad resemblance to another case is not at
all decisive."
* * *
"Precedent should be followed only so far as it marks the
path of justice, but you must cut the dead wood and trim off the
side branches else you will find yourself lost in thickets and
branches. My plea is to keep the path to justice clear of
obstructions which could impede it."."
(Emphasis supplied)
The Apex Court holds circumstantial flexibility, one additional or
different fact may make a world of difference between
conclusions in two cases. Disposal of cases by blindly placing
reliance on a decision is not proper. Therefore, following the
judgments quoted by the learned counsel for the petitioners,
without looking into the facts of the present case, runs foul of
what the Apex Court holds.
15. Wherefore, notwithstanding the fact that the statutes
are cognate, any amount of harmonious construction, will not
lead to a result of acceptance of the submissions of the learned
senior counsel for the petitioner. It is not only the nomenclature
that is different in the case at hand, the very definition of a
cooperative society under the Act clearly means a society
registered or deemed to have been registered under this Act.
33
This Act would be, the Act. Section 21 bars more than two
occasions voting by a delegate to a cooperative society, which
would obviously mean, a society under the Cooperative Societies
Act. This cannot be made applicable to every enactment,
notwithstanding them being cognate.
SUMMARY:
(i) The petitioners challenge to the alleged
repeated delegation fails, as the repeated
delegation is not under the Cooperative
Societies Act.
(ii) Section 21 of the Act bars voting twice over in
a cooperative society registered under the Act.
Therefore, the impugned third delegation does
not violate Section 21, as the first two
delegations were under two different
enactments - The Souharda Act and the Multi-
State Act.
34
16. For the aforesaid reasons, finding no merit in
W.P.No.107749/2025 and W.P.No.107758/2025, both
these petitions stand dismissed.
IN W.P.No.107803/2025:
17. In so far as W.P.No.107803/2025 is concerned,
all the parties to the lis submit and admit that the delegation is
third in line in the elections to the Cooperative Society itself.
Therefore, the issue in the lis stands covered by what this Court
has rendered in W.P.No.107510/2025. It is therefore this Court
deems it fit only to narrate the skeletal facts before following the
law.
18. It is the case of the petitioner who is duly appointed
as delegatee to represent the Society in the ensuing elections-
respondent No.7 Society. The name of the petitioner/delegatee
is found at Sl.No.22 of the list of voters. The delegate of the 6th
respondent has cast the vote in the elections of Siddapura
Taluka VyavasayaHuttuvaligalaSahakari Sangha Niyamit,
Siddapura in its election held on 20.09.2025. This forms the first
of the delegation of respondent No.6 to cast his vote as a
35
delegate. Respondent No.6 again is said to have represented the
elections in Kendra SahakariSagatuMarata Malige Niyamita, Sirsi,
in its elections held on 27.09.2025. This is admittedly the second
time the delegate has voted and is now listed as a voter to vote
in the ensuing elections of the 7th respondent-DCC Bank. The
contention is that the DCC being a Federal Bank, the bar would
not apply.
19. The said submissions are noted only to be rejected
as this Court in W.P.No.107510/2025 has already considered this
issue.
"2. Heard the learned senior counsel Sri.Gurudas Kannur
for Sri.Sourabh Hegde and Sri.Shriprasad Joshi appearing
for the petitioner, learned AGA-Sri.Ramesh Chigari,
appearing for respondent Nos.1,3,4 and 5, learned
counsel Sri.G.V.Bharamagoudar, appearing for
respondent No.2, learned counsel Sri.A.P.Hegde,
appearing for respondent No.6 and learned counsel
Sri.Vishwanath Hege, appearing for respondent No.7
3. Elections were held on 27.07.2024 to the Uttara
Kannada Zilla Sahakari Union Niyamit, Kumta.
4. The delegate of respondent No.6 is said to have
represented respondent No.6 previously in the elections
held for the aforesaid Union, which was held on
27.07.2024. Respondent No.6 again was delegated to
cast his vote in the election of another society in the
elections that were held on 28.09.2025, as a delegate of
respondent No.6.
36
5. The issue now is with regard to whether respondent
No.6 can now again cast his vote, as a delegate in the
ensuing elections.
6. Learned Senior counsel Sri.Gurudas S. Kannur submits
that there is a clear bar under Section 21(3) of the
Karnataka Co-operative Societies Act, 1959 (hereinafter
referred to as 'the Act' for short). Section 21 reads as
follows:
21. Manner of exercising vote:-
(1) Every member, [every representative,] every
delegate and every nominee shall exercise his
vote in person and not by proxy] [at a general
meeting or an election of the members of the
[board] of a cooperative society]
[Explanation.--For the purposes of Section 20
and this section and wherever else it occurs,
the word 'delegate' means a member of a
cooperative society to represent that society in
other cooperative societies.]
(2) Notwithstanding anything contained in sub-
section (1),-- [(a) the [board] of a co-operative
society which is a member of another co-
operative society may appoint one of the
members of the [board] to vote on its behalf in
the affairs of that other society;]
[Provided that where a new [board] has been
elected to a cooperative society, such newly
elected [board] shall send a delegate or
nominee to any other cooperative society
where it is a member.]
[(b) where the Life Insurance Corporation of
India, the State Warehousing Corporation or
such other institutions approved by the State
Government or a market [board] or a local
authority or a firm, [or a self-help group] a
company or any other body corporate
constituted under any law for the time being in
force is a member of a co-operative society, a
person nominated by such institution, market
[board] or local authority or a firm, [or a self-
37
help group] a company or any other body
corporate constituted under any law for the
time being in force, may vote on its behalf in
the [general meeting or the election of the
members of the [board]] of the society;]
(3) A member once nominated by the board of
a Co-operative Society under clause (a) of
sub-section (2) to vote on its behalf in any
meeting of any other Co-operative Society
shall not be changed except by a
resolution passed with substantial reasons
in a board meeting by a two third majority
of the members present and voting in such
meeting. However a Cooperative Society
shall not nominate or appoint any member
of the board to vote on behalf of it in more
than two cooperative societies.
7. Section 21(3) of the Act bars a member once
nominated by the Board of the Co-operative Society to
vote in an election twice over, as the said Co-operative
society should not nominate or appoint any member of
the board to vote on its behalf in more than two Co-
operative societies. It is an admitted fact that respondent
No.6 has been nominated twice over, to vote as a
delegate of respondent No.6-Society, in two of the
elections that were held on 27.07.2024 and 28.09.2025.
Therefore, the bar under Section 21(3) would kick in.
8. Learned counsel appearing for the respondent would
submit that the Society should be permitted to delegate
any other member of the Society to represent it in the
ensuing elections, if the law would permit, this Court
would not put fetters on such liberty of respondent No.6.
9. In that light, respondent No.6 now being ineligible in
terms of Section 21(3) of the Act, he shall not be
permitted to delegate the respondent No.6-Society, and
cast a vote in the ensuing elections. With the aforesaid
observation the petition stands disposed of.
Ordered accordingly."
38
In the light of the said submission, W.P.No.107803/2025
deserves to succeed.
20. For the aforesaid reasons, the following:
ORDER
[I] W.P.No.107749/2025 and W.P.No.107758/2025,
stand dismissed.
[II] W.P.No.107803/2025 is allowed.
[III] Impugned list as Annexure-A in
W.P.No.107803/2025, so far as it relates to Sl.No.20
(delegate Form No.060) in respect of respondent
No.6 and its delegate stands quashed.
Pending applications if any, in all these cases, also stand
disposed.
SD/-
(M.NAGAPRASANNA)
JUDGE
cbc/bkp
CT:MJ
