Proposed Amendment Communication Need Not Include Existing Co-Operative Society Bye-Laws Provisions: Kerala High Court
The Kerala High Court unequivocally held that the communication to the members concerning the proposed amendment of the Society's bylaws, whether conveyed through personal service or paper publication, must exclusively include the entirety of the proposed amendment. Importantly, the Court emphasized that there is no requirement for this communication to incorporate the existing provisions of the bylaws intended to be amended.
In this writ petition, the petitioner Society challenged the refusal to register an amendment to its bylaws. The rejection order was affirmed in the appeal. The authorities refused registration citing non-compliance with Rule 9(ii) of the Co-operative Societies Rules and a Circular issued by the Registrar of Co-operative Societies. Rule 9(ii) stipulated the publication requirements for proposed amendments, distinguishing between societies with less than 500 members and those with more than 500 members.
A Bench of Justice Sathish Ninan held, “Therefore, on a proper understanding of Rule 9(ii) of the Rules and Circular No.25/2016, it could only be held that the intimation to the members with regard to the proposed amendment of the bye-laws of the Society, whether it be by personal service or by paper publication as the case may be, need only contain the proposed amendment in its entirety. Such intimation/ publication need not contain the existing provision of the bye-law sought to be amended.”
Advocate P.C. Sasidharan appeared for the Petitioner and Advocate Mable C. Kurian appeared for the Respondents.
The respondents argued that for societies with more than 500 members, the publication should include both the existing provisions and the proposed amendments. The petitioner contended that only the proposed amendments need to be published, not the existing provisions.
The Court analyzed Rule 9(ii) and the Circular. It held that the distinction made in the rule pertained only to the mode of intimation (personal or paper publication) and not the content of the notice. The purpose in both cases is to inform members about the proposed amendments. The Court disagreed with the respondents' argument that existing provisions must be included in the publication for societies with more than 500 members.
The Court said, “All that the Rule requires is, intimation of the proposed amendment to the members of the Society. In Societies where the number of members are less than 500, personal intimation is sufficient and where the number is more than 500 the intimation is permitted to be made by paper publication. The distinction is only with regard to the mode of intimation. There is no reason to make any difference with regard to the contents of the notice/intimation.”
The Court also clarified that the Circular does not support the contention that existing provisions must be published. The Court noted that the circular emphasized providing details of the proposed amendment, which encompassed the complete proposed amendment itself, not just a summary.
The Court allowed the writ petition, quashed both orders and directed the second respondent to reconsider the registration application without the previously cited reason. The second respondent was instructed to issue fresh orders on the application within two months from the date of the judgment.
Cause Title: The Ramapuram Regional Service Co-Operative Bank Ltd. v. State of Kerala & Ors.,[ 2023:KER:58201]
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