1. The petitioners are before this Court seeking for the
a. Direct the respondent authorities to include the
names of the petitioners in the eligible voters list in
addition to 60 eligible voters as approved by the
2nd Respondent authority vide Annexure-L and
permission for the petitioners to contest and vote
in the election scheduled on
b. Pass such other orders as this Hon'ble Court deems
fit under the circumstances of the case, in the
interest of justice.
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2. Chikkakurubarahalli Milk Producers Cooperative
Cooperative Society Ltd., a Milk Producers
Cooperative Society (hereinafter for brevity referred
to as the "Cooperative Society ") has been
established for carrying out its business in Chikka
Kurubarahalli, Dodd Kurubarahalli,
Gaddanayakanahalli and Bannikoppe and had
enrolled members from each of the above villages.
Subsequently, on 28.08.1998 an amendment was
carried out, by virtue of which the area of operation
of the Cooperative Society was restricted to
Chikkakurubarahalli only. However, the membership
continued as is i.e., members were from Chikka
Kurubarahalli, Dodd Kurubarahalli,
Gaddanayakanahalli and Bannikoppe, and was
reflected in the Balance sheet and elections were
held in pursuance thereto post 1998 till the year
2023.
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3. In the year 2023 the names of the petitioners who
are residents of Dodd Kurubarahalli was deleted from
the list of eligible members or in other words a list of
eligible voters was published without the names of
the petitioners being included in the said list. It is
challenging the same, the petitioners are before this
Court contending that they continue to be members
of the Cooperative Society and as such their names
arre rrequirred to be included in the eligible voters
list in addition to the list approved by respondent
No.2.
4. The submission of Sri.Mahesh Kiran Shetty, learned
counsel for the petitioners is that
4.1. Though by amendment in the year 1998, the
operation of the activities of the Cooperative
Society were restricted to Chikka Kurubarahalli,
not only where the petitioners continued as
members of the Cooperative Society, but also
the petitioners were supplying milk to the
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Cooperative Society which has been accepted
by the Cooperative Society.
4.2. The petitioners have participated in all the
elections post 1998 until now and as such the
deletion of their names could not have occurred
without even as much as issuing notices to
them.
4.3. His submission is that there cannot be a
removal of the petitioners' names without
following the principles of natural justice. He
also relies on Section 14 of the Karnataka
Cooperative Societies Act, 1959 ['Act of 1959'
for short] to contend that if at all there was any
division of the co-operative Societies, the
procedure under Section 14 would have to be
followed.
5. Mr. M.R. Rajagopal, learned Senior counsel appearing
for the Cooperative Soceity would submit that:
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5.1. Post the amendment on 28.08.1998, the area
of operation of the Cooperative Society being
restricted to Chikka Kurubarahalli, any person
who is not a resident of Chikka Kurubarahalli
was automatically disqualified from being a
member of Cooperative Society on account of
having incurred ineligibility for being a member
in terms of clause (a) of subsection (1) of
Section 16 of the Act of 1959 which is
reproduced hereunder for easy reference:
16. Persons who may become members.- (1)
Subject to the provisions of section 17, no person
shall be admitted as a member of a co- operative
society except the following, namely:--
(a) an individual who needs the services of such co-
operative society [and is residing in the area of
the operation of the society] and is competent to
enter into contract under the Contract Act, 1872
(a-1) a depositor
(b) any other co-operative society;
(c) the state Government or the Central Government;
(d) the Life Insurance Corporation of India, State
Warehousing
Corporation and such other institutions as may be
approved by the State Government;
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(e) a firm, a company or any other body corporate
constituted under any law for the time being in force
including a society registered under the Karnataka
Societies Registration Act, 1960 (Karnataka Act 17 of
1960);
(f) a Market *board* established under the Karnataka
Agricultural Produce Marketing (Regulation) Act, 1966
(Karnataka Act 27 of 1966);
(g) a local authority.
Explanation.--For the purpose of this clause, local
authority means, a Municipal Corporation, Municipal
Council, Town Panchayat, Zilla Panchayat, Taluk
Panchayat or Grama Panchayat constituted under any
law for the time being in force.
(2) No co-operative society shall, without sufficient
cause, refuse admission to membership to any person
duly qualified therefor under the provisions of this
Act, rules and bye-laws
(3) Any person seeking admission as a member of
any co-operative society shall make an application in
writing for admission as a member of such society.
(4) Every co-operative society shall within [two
months] from the date on which application for
admission was delivered to such society either admit
or refuse to admit any such person as a member, and
shall send a written communication of such admission
or refusal to the applicant before the said period. If
no communication of admission as a member is
received by the applicant before the expiry of the said
period, his application for admission shall be deemed
to have been accepted by the co-operative society on
the last day of the said period for purposes of section
105A.
[(5)XXX
(6)XXX
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(7)XXX] 1
[(8) Notwithstanding anything contained in this
section and section 17, the State Government shall
be deemed to have been admitted as a member of a
co-operative society on the day it subscribes to the
share capital of such co-operative Society.]
5.2. His submission is that it is only an individual
who avails the service of the Cooperative
soceity and such person is residing in the area
of operation of the Cooperative Society who is
competent to enter into contact under the
Contract Act, 1872 who could be a member of
the Cooperative Society.
5.3. Now that Dodda Kurubarahalli has been
excluded from the area of operation of the
Cooperative Society, a person residing in Dodda
Kurubarahalli cannot be a member of the
Cooperative Society. In this regard, he relies
upon Subclause (e) of Subsection (1) of Section
17 to contend that no person shall be eligible
for admission as a member of the Cooperative
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Society if he is not eligible for membership
under Section 16. Section 17 is reproduced
hereunder for easy reference:
17. Disqualification for membership.- (1) No
person shall be eligible for admission as a member of
a co-operative society, if he,--
(a) has applied to be adjudicated an insolvent or is an
undischarged insolvent; or
(b) has been sentenced for any offence, other than an
offence of a political character or an offence not
involving moral turpitude, such sentence not having
been reversed or the offence pardoned and a period of
five years has not elapsed from date of expiry of the
sentence.
(c) carries on business of the kind carried on by such
co-operative society;
(d) is already a member of a co-operative society
carrying on business of the same kind as itself;]
(e) is not eligible for membership under section
16;
(f) is a paid employee of the society or of its financing
bank; or
(2) If a member becomes subject to any of the
disqualifications specified in sub-section, he shall be
deemed to have ceased to be a member from the date
when the disqualification was incurred.
(2A) If a member fails to fulfil his obligations as a
member under the Act, rules or bye-laws, for a
continuous period of three years, he shall, on the
expiry of such period, cease to be a member.
(3) If any question arises as to whether a member is
deemed to have ceased or has ceased to be a member
under sub-section (2) or (2A), the Registrar may
either suo-motu or on a report made to him and after
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giving an opportunity to the person concerned of being
heard, decide the question.
5.4. This he submits is an automatic disqualification
which occurs after the amendment on
28.08.1998 since post that date, the person
who was not residing within the jurisdiction of
Chikka Kurubarahalli became ineligible to
become a member in terms of clause (a) of
subsection (1) of Section 16 and as such stood
disqualified from membership in terms of
Subclause (e) of Subsection (1) of Section 17.
5.5. He also relies upon Section 18A to contend that
a person shall cease to be a member of the
Cooperative Society in terms of Clause (iii) of
Sub Clause (A) of Section 18A when he incurs a
disqualification and cessation. This he relates to
and reads with Clause (e) of Subsection (1) of
Section 17 and Clause (a) of Subsection (1) of
Section 16 to contend that firstly there is no
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eligibility of membership on part of the
petitioners to continue as members of the
cooperative soceity post the amendment on
28.08.1998 in view of Clause (e) of Subsection
(1) of Section 17, they became disqualified and
they ceased to be members in terms of Clause
(iii) of Clause (a) of Section 18A. Section 18A is
reproduced hereunder for easy reference:
18A. Cessation of membership.- A person shall cease
to be a member of a co-operative society,-
(a) in the case of an individual, on his or her,-
(i) death;
(ii) resignation;
[(iii) disqualification and cessation]
(iv) transfer of whole of his or her share or
interest in the co-operative society to another
member;
(b) in the case of a firm, company, co-operative society
or corporate body,-
(i) on dissolution of the firm or a corporate body;
(ii) on winding up of a company or a co-operative
society.
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5.6. In this regard, he relies upon the decision of the
Coordinate Bench of this Court dated 5.01.2004
in K.B. Lingaraju vs. The Joint Registrar of
Co-operative Societies1, more particularly
paragraph 6 thereof, which is reproduced
hereunder for easy reference:
6. Section 17(2) of the Act states that if a
member incures any of the disqualifications
specified in sub-section (1), he shall be deemed
to have ceased to be a member from the date
when the disqualification was incurred. This
ceasure of membership will apply in respect of
the disqualifications mentioned in Clauses (a),
(b) and (c) of Section 17(1) but the same will
not apply to the disqualification mentioned in
Clause (d). The reason is, if a person is member
of a co-operative society, he is not eligible to
become member of another society carrying on
the same business. If he is ineligible to become
member of another society, his membership in
the former society will not be ceased as ceasure
of membership will come into force only if the
member of the society becomes member of
another society. In view of the ineligibility to
become member of a society by virtue of the
membership in other society, a person cannot
become member of two or more co-operative
societies carrying on same business. Despite
such ineligibility, if a person is admitted into
membership by another society, such
membership is invalid and contrary to Clause (d)
of Section 17(1) of the Act. In other words, if a
member of a society is admitted as member of
another society carrying on same business, the
admission in the other society cannot be
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recognized as a valid membership. Therefore, if
the petitioner was admitted as member in the
3rd respondent society contrary to Section
17(1)(d), it was the mistake of 3rd respondent
society. On account of that, the membership of
the petitioner in the 2nd respondent society will
not be ceased as the petitioner cannot be
recognised as member of 3rd respondent
society. The first respondent has not considered
these aspects of the matter while passing the
impugned order. The order is passed without
application of mind to the provisions of the Act.
Hence, the same cannot be sustained.
5.7. By relying on Lingaraju's case, he submits
that once a disqualification occurs, it results in
automatic ineligibility and therefore the removal
of the names of the petitioners from the list of
eligible voters is proper and correct.
5.8. The said judgment in Lingaraju's case had been
taken up on appeal The Tumkur Grain
Merchants Co-operative Bank Ltd., vs. K.B.
Lingaraju and others2, he relies on the
judgement of the Division bench more
2 ILR 2005 Karnataka 5673
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particularly paragraph 6 thereof, which is
reproduced hereunder for easy reference:
6. A reading of the aforesaid provisions would
indicate that, a person is ineligible for admission as a
member of a co-operative society, if he has incurred
any disqualification as envisaged under clauses (a) to
(d) of sub-section (1) of Section 17 of the Act. For
our purpose, clause (d) of sub-section (1) of Sec. 17
of the Act is relevant. It says, that, if a person is
already a member of a co-operative society carrying
on business of the same kind as itself; then that
person is ineligible for admission as a member of a
co-operative society.
Sub-section (2) of Section 17 of the Act states that, if
a member is subjected to the disqualifications
specified in clause (a) to (d) of sub-section (1) of
Section 17 of the Act, he shall be deemed to have
ceased to be a member from the date when the
disqualification has incurred.
The legislature knowingly has used the expression
"deemed" to deem that, a person who has acquired
the disqualifications, which are contemplated under
clauses (a) to (d) of sub-section (1) of Section 17 of
the Act, is ineligible to be a member of the other
society. This is all that we see in Section 17 of the
Act.
5.9. By relying on the decision of the learned
Division Bench of this Court, he again submits
that there are deeming provisions under section
17 as regards to disqualification and that
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deeming provision kicked in subsequent to the
amendment on 28.08.1998.
5.10. He also relies upon a decision of this Court as
regards to the very same Cooperative Society
in W.P. No. 161/2025, dated 14.02.2025 to
contend that this Court has directed the
election process to be continued as per the
amended By-laws and therefore he submits
that since the election is to be as per the
amended By-laws, as amended on 28.08.1998,
the petitioners cannot be said to be members,
let alone eligible members to vote at the
election to be carried out.
6. Heard Sri.Mahesh Kiran Shetty, learned counsel for
Sri.T.Dedakhalendar, learned counsel for the
petitioner, Sri.M.R.Rajagopal, Senior counsel for
Sri.H.N.Basavaraju, learned counsel for respondent
No.4, Sri.Yogesh D.Naik, learned counsel for
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respondents No.1 to 3 and Sri.T.L.Kiran Kumar,
learned counsel for respondent No.5. Perused
papers.
7. The points that would arise for consideration are:
i. Whether post the amendment to the
byelaws, the petitioners who were earlier
members of the cooperative society can be
said to be persons who are not eligible to
become members of the Cooperative
Society and thus deemed to have been
disqualified in terms of Section 17 ceasing
to be members of the cooperative society
under Section 18A of the Karnataka
Cooperative Societies Act, 1959?
ii. Whether the order passed by this Court in
W.P. No.161/2025 dated 14.02.2025 can
be pressed into service by the petitioners
to contend that the petitioners are
ineligible to participate in the elections?
iii. What order?
8. I answer the above points as under:
9. ANSWER TO POINT NO.1: Whether post the
amendment to the byelaws, the petitioners who
were earlier members of the cooperative
society can be said to be persons who are not
eligible to become members of the Cooperative
Society and thus deemed to have been
disqualified in terms of Section 17 ceasing to be
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members of the cooperative society under
Section 18A of the Karnataka Cooperative
Societies Act, 1959?
9.1. The interconnection and interrelation between
Sections 16, 17 and 18 as sought to be made
by Sri.M.R.Rajagopal, learned Senior counsel
have been placed hereinabove.
9.2. What is required to be referred to is the
amendment which has occurred to clause (a) of
Subsection (1) of Section 16 on 11.02.2013. It
is by virtue of the said amendment, that the
words 'and is residing in the area of the
operation of the Cooperative Society' were
included with effect from 11.02.2013. These
words were not in existence prior to that date.
The said provision thus read as under till 2013:
16. Persons who may become members.- (1)
Subject to the provisions of section 17, no person
shall be admitted as a member of a co- operative
society except the following, namely:--
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(a) an individual who needs the services of such co-
operative society and is competent to enter into
contract under the Contract Act, 1872
9.3. Admittedly, the cooperative soceity has been
established long ago and amendment was
carried out on 28.08.1998. Admittedly, the
petitioners were members of respondent No.4-
Cooperative Society prior to and as on
28.08.1998 and there was no restriction on a
person who is not residing in the area to be
member of the Cooperative Society in terms of
clause (a) of Subsection (1) of Section 16,
which restriction came to be included only on
11.02.2013.
9.4. Thus, insofar as the present case is concerned,
the date on which the petitioners became
members of Cooperative Socielty, there was no
qualification of the petitioners to be members
residing in the area of operation of the
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Cooperative Society. Even post the amendment
in the year 1998 till the year 2013, the
requirement was not present due to the
amendment to the Act having come into force
only on 11.02.2013. Thus, it cannot be
contended that from the date of the
amendment to the byelaws on 28.08.1998, the
petitioners became ineligible and or became
disqualified and or ceased to be members of
the Cooperative Society post the amendment to
the bye laws dated 28.08.1998 since the
eligibility criteria under clause (a) of subsection
(1) of section 16 did not require it to be so,
thereby the operation of clause (e) of
subsection (1) of Section 17 disqualifying the
petitioners would not have occurred on
28.08.1998 bringing into force the cessation
under sub-clause (iii) of clause (a) of Section
18A.
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9.5. If at all, it can only be contended by the
Cooperative Society that this ineligibility came
into force on 11.02.2013. The amendment
which is brought about to Section 16 is by way
of insertion, not by way of substitution.
Therefore, the inserted provision would only be
prospective in nature and not retrospective and
as such, the requirement as regards eligibility
could not be made retrospective in so far as the
Cooperative Society is concerned under clause
(a) of subsection (1) of section 16, thereby the
operation of clause (e) of subsection (1) of
Section 17 disqualifying the petitioners bringing
into force the cessation under sub-clause (iii) of
clause (a) of Section 18A can not be said to
have occurred retrospectively.
9.6. In that view of the matter, I answer point No.1
by holding that the petitioners who have been
members of the Cooperative Society prior to
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the amendment, having been members of the
Cooperative Society on the date of the
amendment to the byelaws and continuing to
be members of the Cooperative Society
thereafter when there was no ineligibility in
terms of clause (a) of Subsection (1) of Section
16, they will continue to be members even as
on today and the disqualification under Section
17 and cessation of membership under Section
18A would not be applicable in so far as the
petitioners are concerned.
10. ANSWER TO POINT NO.2: Whether the order
passed by this Court in W.P. No.161/2025
dated 14.02.2025 can be pressed into service
by the petitioners to contend that the
petitioners are ineligible to participate in the
elections?
10.1. The submission of Shi M R Rajagopal learned
Senior Counsel is that in view of the order
which has been passed in W.P. No.161/2025,
the elections are to be held as per the amended
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Bylaws. On enquiry as to who the petitioners
were in the said petition, it is submitted that
those are the persons who are residing in
Chikka Kurubarahalli, who are the eligible
members post the amendment to the byelaws
on 28.08.1998.
10.2. If that be so, the so-called eligible members
had not made the so-called ineligible members
like the petitioners a party to the said
proceedings and the order passed is behind the
back of the petitioners who are not parties
therein.
10.3. In view of my answer to point No.1 the
petitioners continuing to be members of the
cooperative society the amendment to the bye
laws not having any detrimental effect in so far
as the membership of the petitioners is
concerned the said order would not have any
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bearing in the present matter. The aspect of
membership not being decided in that matter.
10.4. That apart the said decision could not be said to
have decided the rights of the petitioners who
were not parties to the said proceedings. The
cooperative Society or the so called eligible
members cannot press the said judgement into
service to contend that the petitioners herein
are disqualified members whose membership
has ceased. Hence, the said order in my
considered opinion cannot be held to be
applicable to the petitioners, though it is
contended that the petitioners had filed an
intervening application, the said intervening
application was held not to survive in view of
disposal of the petition.
10.5. Be that as it may, as held Supra, even as per
the amended Bylaws, the petitioners would
continue to be members and cannot be said to
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be ineligible, disqualified or ceased to be
members of Cooperative Society. Hence, even
on that ground, the said order dated
14.02.2025 insofar as the membership of the
petitioners is concerned, would not be
applicable.
10.6. ANSWER TO POINT NO.3: What Order?
In view of my answers to Points No.1 and 2, I
pass the following:
ORDER
i. The writ petition is allowed.
ii. A mandamus is issued directing Respondent
No.4 to include the names of the petitioners in
the eligible voters list subject to Clause (2-A) of
Rule 13D of the Karnataka Cooperative
Societies Rules, 1960 and Section 20 (A-iv) and
(A-v) of the Karnataka Cooperative Societies
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Act, 1959, within a period of one week from the
date of receipt of a copy of this order.
iii. Needless to say, until then elections cannot be
held and the Administrator shall continue to
discharge his duties.
SD/-
(SURAJ GOVINDARAJ)
JUDGE
LN
