Radhika Mittal
In a significant ruling, the Karnataka High Court has declared the powers granted under Section 128-A of the Co-operative Societies Act, unconstitutional, stating that they infringe upon the autonomy of cooperative societies, particularly in the areas of employee recruitment, transfer, and disciplinary actions. The Court emphasized that these powers are essential and fundamental to the functioning of cooperative societies and cannot be taken away or delegated to a third party, such as a Federal Society, which has no role in the formation or management of the cooperative society.
The judgment highlighted that the powers conferred on the Registrar under Section 128-A effectively strip cooperative societies of their ability to manage crucial internal functions, thereby undermining their independence. The Court pointed out that while the State has the authority to impose reasonable restrictions on cooperative societies, it cannot completely remove their fundamental rights, especially regarding the recruitment, transfer, and discipline of their employees.
The Court further asserted that the right to form a cooperative society is a fundamental right conferred on citizens and must be exercised by the members themselves. This right cannot be nullified by handing over essential management powers to an external body. The Court thus concluded that the provision under Section 128-A imposes an unreasonable and arbitrary restriction on cooperative societies, making it unconstitutional.
Judge: Hon’ble Justice A.M. Khanwilkar
Case Name: XYZ Co-operative Society vs. State of XYZ