ci ri I e IN Rh a .1 Ii. etAEe : o d dr, g 4’ p l’t r e t D c’r i? i — b 1% a 4 ot ,ta i,Di’t ei. • t x r It sn ta eir, d ke) A. t of asks r,D . n + , •, 4 15 t lr a. A e I e r • .r t e - r ‘at ‘a t I p —2— This writ petition is filed under Articles 226 & 227 of the Constitution of India praying to quash Annexure D’ dated 21—5-1998 by R4 prohibit the respondents 4 to 6 from acting as nominated directors of third respondent—society. This writ petiton is coming on for orders this day, the Court made tte following: ORDER. 1. Issue Rule. The writ petition is taken up with the consent of parties. 2. The petitioner was elected as a director of the third respondent—society. The third respondent— society had a Government share capital of 1t6,68,000/—. The society has also borrowed a loan from the Govern ment to the extent of h.39,000/—. Since the State Government has subscribed to the share capital, the State Government nominated three directors to the society by its order dated 21—5—1998 in accordance with section 29 of the Karnataka Co—operative Socie ties Act (hereinafter referred to as the ‘Act’). 3. Section 29 of the Act gives power to the Government to nominate its nominee on the Coittee of the Co—operative Society if the Government has subscribed to the share capital of the society. .. 3 I-. i t (7 II it a t + t Pt C t 11 y. t di yrm ‘-edt tt — it sty te t’eG at e as cw I’ a a ver • r ed e cite C 00 t e 4- r4 aiti .6, , —1 • ciet e ‘ott d a • , — id • 0%. Vt • 0 i ‘p r I “ S.No,16/Yojane/CR 76/98—99 Office of the Asst Registrar of Co—operative Societies, iaveri, dated : 25—5—1998, CERIFICATE. It is certified herewith that there are no dues from the Bydagi taluk Agricultu ral Produce Marketing Co—operative S;ciety Ltd., Bydagi to be recovered frow the said society either the Government share amount or the loans. Annexures A,.irl,A-2 and B are copies of the treasury challans to show that the monies were paid in the treemury. 7. According to the learned cinsel for the petitioner the amounts were paid by the society pursuant to a reolution passed bythe board of directors and a certificate was aiso obtained from the second respondent to the fect that the entire amount of the share capital has been returned to the State Government, Therefore, it was submitbed that the continuation of respondents 4 to 6 as Govern ment nominees beyond 25—5-1998 is in aiolation of Section 29 of the Act. Tel AU 4’ r flj x ant •ti e t e / ted qd ati Bated t’ ii ter tr t re tip eoi e Cat by bt itt tee teno at Ii ‘t,y eta t te as o tin eni t r on a 4 e BxOteflfle norinee. 1’ aeo n 1* be tf .r r a a p t e 6 C C 11 1’ .3 9 o • Fe 0 d t U t t ts lu t e l!s I —6— 11 • tbe second suflsrirn was triat the Lss±stant iefietnr in 3tOity%c eacerti eon exalt + S’ateG met rgt’t e ‘in Pitt Go • twn r db ooie t (Annexure Tha third submieejcz. was t’iat te retirn of ita share caDitni by the cie+y was unilateral and ther’ was nod.iaM b the Cta+e 3ove uant Lot return of Ve st “pitpl • ret m tn yak ir • ti hould detin long. t .i.s not i to tbia Court to go behind a validly pase’d resolution while eeccsing pow-rs uncer Eectin 26 of the Ccnst±t 4 ti r of India. I have perascd tne cop; of tLe re- ti n. It a’js tr to be it 0 der on ‘etc t. 1. cond ia or •d sd . Jqyq i I .“stz] va’ +b’ 3 t Ass:st!n Regi’,+rr ted ‘a.- e”’cs’i tO g10 cest’±n*e on oc’ia’f of ita Sn’ ;vnrnrnen’. Thie rq.rer eo’re th’ugkt. • t ayeic.ni: •?atil hr r’led cc i”,+ fi t’ 243 1 8n attel 34 3 1 t ot - c+whe t e ‘alt ltte Do—o’r’nve Dcic-ia r”une ereza of ooeren.r I I. extends o a Te t oompe’-n’ authority atrat. 16. n other words ra Gttmitee t 1 iat C±rcular dated 4—5—1t9L !3e8 n3t cnfer afl3 autority on the Assistant Registrar to give a cer 4 ±ficcte. ‘ftwever. or a perusal of the rotific-tinz rel:ad c; ‘. Vr. Petil 3actc’ 29 is not ter.,lt with. e o’her sectLts wti± 1 b are 7 ,+ relevant 1% t .e ca:e as been -ee1t *i.ti’ undex tbs heading °r’ 4 te:eforc is nc &caistane -o ‘ft° ret pondent. ok on tte de’iai— akw St C ty Act. £ ) I’ a a terson Sit’. a nno we a c n ‘e4ia1t IS. Jr thi A s flvar b) tue Asa:’ent Repis a oer’fiatc o,nrot be bn.hed—abide cmi z fact ra ft h• ob 0 eo— tiot f.Le on bet’lf or ,e S’-t. Govexnnen was b tte Ls:±s”r, ;egic’ar rf Oo—opcrr’ne Soo±etias. This was curtc5sly tb° rae ffcer w!c pessed Lnrexure ‘a’. S 4, egis’rar is the a + the Assisv.nt Kegi— 17. qe mus H-n of I xc floft C’ gAd Ltd R ‘at an t e f I”- (.s. A flit aS I’ to ‘a a I C, V I II, -8- 19 • Realising the faux-pas a better affidavit was sought to be filed on behalf of the Government by the Under Secretary to the Government Depart ment of Co—operation, which did not advance the case to the Government any further. 20. The stand of the State Government was that there was no demond from the Government to return the share capital and that the society unilaterally credited the ount. It was 4so stated that the certificate issued — per Annexure ‘C’ was without jurisdiction and with out prior permission. 21. Mr. B.Veerappa, the learned High Court Government Pleader submitted on behalf of the first and second respondents that the proper authority to demand the return of the share capital is the Government and the Government alone. Therefore, he submitted that the cerfl— ficate given by the Assistant Registrar is nct binding on the Government. .. 9. I, a). 29. e: s ,dv’-rt t’, r PsO1flaOflS “f 1€aIt CudLi. orte thai • CIa f a tzg k at io t hk t’e enar C., P1 wue rtwz,.$ 0/ tb soae;y oa accoarit f the tesy vIOS Alt. toe by a ateGoern.at an tue soc et. t $ oebaaee. of the dennd maae oy the JoverrLaent, tue a.ciety was ootiged e.ttin trrteshrccp.al I the. r 4’ ra of trie sm wit I ha beel uni. iteral oy tin socasty, taco certaini’ that at ro be. na sag a ‘it tite Goveragan r, a bar barar’ arat wds, r e e rriea a urae or tue 1 etitioner aoes not subacrioe Lu tue uo L.sson that if the shrc capital is re. - reda flatiall, i’’fli°til ebidin on ttw dovernuent. r• sue Learned cnseL #n; te fret1toner drew z; a;tertson to :rrer,re—s. nnnexu:e—P is the coaa ts’rssuedc. te’3r pa t Jf .o—..ratave ,ocxet’es t: the j, °ij,oer_ oc st. at aaraex.*zt—k tie dOafit esstraS a C’ t at h i t%r4 L. tat ;YIWt CLbaL cz tat Jovrnc.cnt. C e et a quote toe Last two carwrsjis in toto a— t a ion d a tie. x frec ette tnt tflc aon’cn.e ,o—urat’ve iaibt has aa:ectto to rtcover ba.t the jovera— santa’ snare c.Llta d&3 ut ha atZwh Of the societies tnat nove faaIeJ t colts t t ‘ii r cait 1 nau t v rell’I to :ke .n4re cu,a tat arnount of thu 2overn— writ. ‘c°fr neal’ ‘tato e’t the snare ca$ta!. amount frost 1 jour societj’s a abe. ae etc j £he Govern&en tave dccide4 to with— drao 0 hear srre ce,.ital cwunt from such oi the L.A i.hl. • d cietae. that ‘a-e fasea to co&lect the share cajatal of tie r aeflers rafljj)u to the. Goverrnnt’s ..aare .apatai. oore 31.3.1d. rlence yuar° rio e tocotlec th saa caitaL aaount trom the seoers of L.A.r..A. bc e y 1 ae lss o ti uo e.rLert” nare capitas watnout giving scowe to wathdra. tenrc ttis rt s, ensea There at so...e oasute as LZ t’ie exact traL.slation fArizareF. 1 saubstteab tneland Govt a er 1 arer t at ha a s at it e i zre. a an twist nt rcitt; tnoui not nit £9ua acan Lean 6 a&en far the •i.tdaa4l of snare sia I Gtjiatta t aUs’ tnaar wn saare ca ra’ eqal to sflare cra at of the Govaznaer’t on or riefore 5F3•j99 (F 4 .me •1 — 11 — 24. Reliance was also placed by the petitioner 0 n Annezure—G. Annezure—G is also a comainica— tion addressed to the petitioner—society by the Deputy scegistrar. Anneiwre—G is more emphatic. The relevant portion of Annexure—G (English translation) reads as follows :— “in addition, it is also noticed that the TAPCM societies are not at all mating any efforts to collect the share amounts from their members and that the TAPON societies depend ing only on the Government share capital cannot be strong at all. £he ffon’ble Co—Operative i4inister has directed to withdraw the share capital from such of the T.A.P.C.14. societies that have not collected the share capital amount from their ma— bers parallel to the Governments’ share capital amount. Therefore it is directed to take active interest to collect the share amount compul sorily from the members and to initiate suitable action before 31.3.1998 to achieve the goal in the matter. This subject will be noticed specifically in every monthly meet ing and the progress will be watched. V I it a auzorriea nat nt ac a win be taten to ditharew Gvverns.ct bndxe ca;ital from sch of the i.A.P.C.A. ocaetae. tnt nay a d 0 c1. ect the share amount from zemoers in eretlel to tie stare w urt a t e Goveramert oefore 31.3.9:18. It as roticed with dissatisfaction tiat no artereat as taken so far a •tate f tne directioc jitef ace 1 ) given in the matti. . ibese tio coa:anaca:ions Clearly indicate the stre s suiterco oy ne moo sty from the ret— wondents to the efiect that if tnt societr was r t anLe t ‘aba as the cçu vat at awunt ‘t snaze ce4.itai on their own, toe share ca&ataI a ye te tie ave rant shall be witidrewr. As far as this socaetj is c,ncernea the society wasrot ane a ooaaaate eiira ‘Oat ce,watai. Scorn ats on memoers oc r before 3 • .1906. j U’ b z d t s. 6 in a resoluton as ‘assed by tne doard of iirectors Ar ur—u. aa Ii fbi i Annerar—, reads as fotohs s ‘l ada 3lca4’u. is a irduce Co—o*ratave .Laraceting 2:cAety Ltd flidgi. fr/ r -13- si. t°LnoffiCe f ti yagih.ka4ga— casturas enai.ace Uo—erative .4artet— ing oociety ..ila., .yafli Date time 3.4.1998 weonesday 1—.j’ ta. w. .r car r°°r aubJbct of iteturniog the xesz]atizn i;o.6(a) sk-reaaoritofthe e’ltdt OV fl1 tkc tat], snare 3i.nt and the inn aoant to tat. onrna it nania usig as ;e the directfro of the w’oaty nefiatrar aiade in Qc a atiJy cc inc, and as it is not g.ssibie to coLLect tat snare amount arefle t taC fu I hare amount of Oonrr.ient. rrooser —— hri i.b.Zoddaaoadar f ridenz ecor.oer r— .hri F.L.eatii of tadas. a et tig dies 3. e a ter tie trnre acti n of thc. aocxety. Sd/a (ia.b flange dar) l.a.. .natanevar; ;ani4’er hdiran.” 26. .“naja f aEitJeZLleS”i, aid J es at •uaeat cU’z it a scat ct i a ae aaae b4 we tate JGvernaent. On a :a.a.. of bilt CIL,tiflOfttL3fl it as clear that bee as it a’IbJ 1’ aC ovrbnt aizectia 6 tct socaet; uG bine saare cda;aa t(tL.1V4 1 &dt ta he shar of bhe Governnent aid I S — — 1 7 loS Oh St ui& a e dlt capital acti.n as tc oe taken against the rciety oy •esnng et.rn of it s’ia e c .it 1. t no Icn n uiat cti * ulc iave beer taken if tue share capita]. wad not returned to the govern— a 27. st was aaomitted Oj iii. nasa 6harithaaagoder tatolnras f Uor cud iae bat ifthe share CSditai was not returned. .aergenc; mcssures tnaer hiaction 3Z,A CouLd have usea or a thow cause r. tact oula aa c. •rve urdcr tc.t 5 ji o the oociety. .Lt lb unaer these circumstances, thc. 1. nc co net for the t io e s bai’Pd that a rel.o].uti.,n was passed .aanng aeference to tht oeaana maTh cy the aovernnent to return the see _safta sie. w aaSu— .aitted aj the sea&nt3 counsel for tae £.etitxoner rat certfiate 46 s atknczur°—C y tt. As istant is rar t3 he elf .ct trat tL. snare ca&.atas investd an Pm societj gias teen r v at ; c. c gal t 10 e eS. ne saraeo Jo,ernent £.eader aub.nttea t kit t g 3 C itce a. 1 nexure— *25 ot ca 1 ,eter.t to oo so in view cf the circils at pkezare 1—2. A exuse_$_2 is aLGal La uhresdir tio is gien / p y et p were aiG in tne asury ui1atera1ly I ti a t e, ehvc 1 & exica ± cud S coo in that context auntxure given cy te Aesistaut re 6 itrar aasmes impOrtance St Ca no be tat a wa cry d by r. Ve ra pa tflat Annexures ± and S are only suggestive and r a 5o nd tr St te S e e t W au t texe into account that Annexurc—C was ±ssued by tOw bsistant :eistrar who was a reponsib1c ULLL L ‘Mill lOAf %., i..aLIOJ (It jQ ha £ oration f nnntxures I and S. nnnexures ano S inaicate t t as c rctjo wi 1 b taken b’ the Govern— ViS4tfrf acut I r za4eeiee,Jtrse harc cacital. 5 we taxe irt a ou t t cu lative b kyx und of he facts of he ase, it cannot cc rulec uu; toat there was a threat boning e r te c y ce S aety to se urc tOe snare copltal if ‘cey a n, 4Jr re ourc 5 o oneir wn. RI f cdutAr€s A, , coo re ‘0 w reaa harnoniously, it c rtainry gives the in ession F a -16— that there was a demand for return of the share capital. It cannot be said that the share capital was returned unilaterally by the society and that there was no demand by the State Government. 32. £he learned counsel for the respondent relied on an unreported Judgment of this Gourt in W.2. iio.3658/1995 dated 27th October, 1997. In this case the share capital was admittedly refunded by the society. However, the Court held that there was no demand by the State Goverraent and therefore returned the share capital in the facts .1 ‘F aria circumstances of the case was unilateral. .4j In that view of the matter the learned Judge in that writ petition directed to make a re presentation to the State Government and take orders from the State Government. 33. This case is different since reliance is placed on Annexures 1, G and L to show that there was a demand and pursuant to the demand by the State Government Annexure—E was issued. There fore, the Judgment relisi on by the learned counsel for the respondents may not have any application to the facts of this case. 1-f 4 / -17 24, t S 1’ -t j 5 0 1 tOG I. c2 e L--.40 fl tie ISS, Juc)e:tS ;iat a re reautatl%JLJ ireaç7 P€flClia& ottore ae tate averneat a eica g ttot tic. - ovc..n.e3t sh,old with&aq t fl 7 ati fl I C Lii e t r d it iS at DtSt bIt t t fl GOv-rn t] tO Qc’’Q Lie rtLtr one w,i or tate otGer in aCeL0aaDe sti jay. 75, n this CdDe ad:ittoLy, thc. atte hqs ALvv ,vct W 5 t :c a 1a octagon a-c at rf t tat thrc Was flO nJ fnr I r’ I - a 2- a the U’JiInateQ oIetora re contirolag an 0111cc V3I2tJ UI Viltuc of aectlon oj of tt-ie act. rrefxe, no osefA -or,na± a,id L’- s’rveo 0 c.itnc uCi 0 ‘oa° G0V0nt1,.. • oae a a a to r a f ioroearng t-e resoro’—cts f car Ut ‘11)2 as n;m:r-jte2 oarcct- rs of to’- ca aJa IJ& nOt IOU tn a rxoi 4 e a atn soc let r ca o I oath 010 - r the a re vaJd 0 Ii]’ a • accorInL the wtat ctiaron IS eii-’wea, I aic ao_,olo e. no root a to cc st. Sd/ JUDGE 7,)