1 in the High Court of Karnataka at Bangalore Dated This the 15Th Day of July, 2013 B E F O R E the Hon'ble Mr. Justice A.N. V

IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 15TH DAY OF JULY, 2013

B E F O R E

THE HON’BLE MR. JUSTICE A.N. VENUGOPALA GOWDA

WRIT PETITION NOS.27023-27039/2013 (CS-RES)

BETWEEN:

1. M/s. TEACHERS CO-OPERATIVE SOCIETY LTD., VITTLA, VITTLA POST, BANTWALA TALUK, SOUTH CANARA DISTRICT – 574211, REP. BY ITS GENERAL MANAGER: KRISHNA PRAKASH.

2. M/s. VITTLA GRAMEENA SAHAKARA BANK NIYAMITHA, VITTLA, VITTLA POST, BANTWALA TALUK, SOUTH CANARA DISTRICT – 574211, REP. BY ITS CHIEF EXECUTIVE: NEELAPPA GOWDA.

3. M/s. ULI SEVA SAHAKARA SANGHA LIMITED, KAKKEPADAVU, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS GENERAL MANAGER: NARAYAN K.

4. M/s. AMMEMBALA SEVA SAHAKARA SANGHA NIYAMITHA, MUDIPU POST, KURNADU BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS GENERAL MANAGER: NAGARAJA BHAT.

5. M/s. KAIRANGALA VYAVASAYA SEVA SAHAKARI SANGHA LIMITED, KAIRANGALA, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS CHIEF EXECUTIVE OFFICER: PRABHAVATHI.

6. M/s. PUNACHA AGRICULTURAL SERVICE 2

CO-OPERATIVE SOCIETY, PUNACHA POST, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS MANAGER: K.UMESH POOJAV.

7. M/s PANEMANGALORE AGRICULTURAL SERVICE CO-OPERATIVE SOCIETY LIMITED, PANEMANGALORE, BANTWAL TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS CHIEF EXECUTIVE OFFICER: MOHAN PRABHU.

8. M/s ALIKE SERVICE CO-OPERATIVE SOCIETY LIMITED, ALIKE POST,SATYA SAHI VIHARA ALIKE, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS CHIEF EXECUTIVE OFFICER: UMESH NAYAK.

9. M/s PILATHABETTU SERVICE CO-OPERATIVE SOCIETY LIMITED, PUNJALAKATTE, PAILATHABETTU POST, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS CHIEF EXECUTIVE OFFICER: H.BOOBA.

10. M/s KAJEKAR CO-OPERATIVE AGRICULTURAL BANK LIMITED, PANDAVARA KALLU POST, KAJEKARU, BANTWAL TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS MANAGER: SARASWATHI.

11. M/s AMMTADI SEVA SAHAKARA SANGHA LIMITED, MODAN KAPU POST, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS MANAGER: U.BHASKARA.

12. M/s. PERUVAI AGRICULTURAL CO-OPERATIVE SOCIETY LIMITED, PERUVAI, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS CHIEF EXECUTIVE OFFICER: GOPALKRISHNA BHAT. 3

13. M/s. KAVALAMUDURU VYAVASAYA SEVA SAHAKARA SANGHA NIYAMITHA, KAVALAKATTE POST, BANTWALA TALUK, SOUTH CANARA DISTRICT - 574211, REP. BY ITS GENERAL MANAGER: P.RAVINDRA POOJARI.

14. M/s VAMADAPADAVU SEVA SAHAKARA SANGHA NIYAMITHA, VAMADAPADAVU POST, BANTWALA TALUK, SOUTH CANARA DISTRICT – 574211. REP. BY ITS CHIEF EXECUTIVE OFFICER: ALBERT C D’SOUZA.

15. M/s MANCHI VYAVASAYA SEVA SAHAKARA SANGHA NIYAMITHA, MANCHI, BANTWALA TALUK, SOUTH CANARA DISTRICT – 574211. REP. BY ITS CHIEF EXECUTIVE OFFICER: VENKATESH PRATAP C.

16. M/s NERALAKATTE VYAVASAYA SEVA SAHAKARA SANGHA LIMITED, NERALAKATTE POST, BANTWALA TALUK, SOUTH CANARA DISTRICT – 574211. REP. BY ITS CHIEF EXECUTIVE OFFICER: H.SADASHIVA ALVA.

17. M/s MANINALKURU SEVA SAHAKARA SANGHA NIYAMITHA, MANINALKURU POST, BANTWALA TALUK, SOUTH CANARA DISTRICT – 574211. REP. BY ITS CHIEF EXECUTIVE OFFICER: H.SUDHAKAR SHETTY. ...PETITIONERS

(BY SRI NAGAIAH, ADV.)

AND:

1. THE STATE OF KARNATAKA REP. BY ITS SECRETARY, DEPT. OF CO-OPERATION, GOVT. OF KARNATAKA, BANGALORE – 560001. 4

2. THE DIRECTOR OF CO-OPERATIVE AUDIT, NO.17, JAYA NIVAS, SHANKER MUTT ROAD, BASAVANAGUDI, BANGALORE – 560004.

3. THE DEPUTY DIRECTOR OF CO-OPERATIVE AUDIT, SOUTH CANARA DISTRICT, MANGALORE - 574211. ...RESPONDENTS

(BY SRI K.A.ARIGA, AGA)

THESE PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DECLARE THE SECOND PROVISO TO SUB SECTION [1] OF SECTION 63 OF THE KCS ACT AS AMENDED BY SECTION 34 OF THE KARNATAKA ACT No.3 OF 2013 BY THE FIRST RESPONDENT PUBLISHED IN THE KARNATAKA GAZETTE DATED 11.01.2013 VIDE ANNEXURE-B AS UNCONSTITUITIONAL AND VOID ETC.

THESE PETITIONS COMING ON FOR FURTHER HEARING THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

Main prayer in these writ petitions is for a declaration that the second proviso to sub-section (1) of S.63 of the

Karnataka Co-operative Act, 1959 (for short, the Act), as

amended by S.34 of Karnataka Act No.3 of 2013, as unconstitutional and void and for quashing of the consequential communications – panels of Auditors, sent by the Director of Co-operative Audit and for grant of consequential reliefs. 5

2. Heard the learned advocates on both the sides.

3. Seeking identical reliefs, certain co-operative societies, registered under the Act, had filed

W.P.Nos.79003-79014/2013. After hearing, the following questions were raised therein, for determination:

(i) Whether restricting the choice of a Co-operative Society to a panel of auditors and auditing firms, not exceeding ten, by the second proviso to sub-section (1) of Section 63 of the Act is arbitrary and violative of the proviso to clause (3) of Article 243ZM of the Constitution? Whether the restriction is also violative of Article 19(1)(c) & (g) of the Constitution?

(ii) Whether the impugned communications restricting the choice of a Co-operative Society to a panel of three Auditors/Auditing firms is illegal?

Upon consideration of the rival contentions and while allowing the writ petitions on 05.07.2013, it has been held as follows:

“ 9. In my opinion, the restriction imposed by the second proviso to sub-section (1) of Section 63 of the Act restricting the choice of a Co-operative Society to choose an Auditor or an Auditing firm from a panel of auditors & auditing firms, not exceeding ten, is arbitrary and violative of Article 14 of the Constitution . It is also violative of the proviso to clause (3) of Article 243ZM of the Constitution as the said 6

constitutional proviso provides for a panel for the State i.e. one panel for the State and also gives a choice to every co-operative Society to choose any of the eligible auditors or auditing firms from the said panel. Hence, providing separate panels of a few names to every Co- operative Society in the State as per the impugned proviso is violative of the constitutional proviso . Though under Section 13(2) of the General Clauses Act, 1897 , words in the singular shall include the plural, and vice versa, the context does not admit of such a interpretation of the constitutional proviso i.e. permitting plurality of panels, like giving separate panels of a few names to every Co- operative Society in the State as is done now. Any law which contravenes the Constitutional provisions is unconstitutional and void. Therefore, the second proviso to sub-section (1) of Section 63 of the Act which restricts the choice of a Co-operative Society to choose an auditor or an auditing firm from a panel, not exceeding ten, is unconstitutional and void being violative of Article 14 and the proviso to clause (3) of Article 243ZM of the Constitution . Consequently, the communication sent to each of the petitioners giving a panel of only three names of auditors & auditing firms to select any one of them from the said panel to audit the accounts of their respective Co- operative Societies is also illegal. In the view I have taken, it is unnecessary to examine the contention re. violation of the fundamental rights under Articles 19(1)(c) & (g) of the Constitution . For the reasons stated above, I make the following order:

The second proviso to sub-section (1) of Section 63 of the Karnataka Co-operative Societies Act, 1959 is declared as unconstitutional and void and shall not be given effect to. Consequently, impugned communications are also set aside. ”

4. Perused the aforesaid Order. It is trite that a prior decision of this Court on identical facts and law binds the Court on the same points in a later case. Here, I have an Order, admittedly rendered on facts and law, indistinguishably identical, and that Order must bind.

Following the Order, noticed supra, these writ petitions are allowed. Since sub-section (1) of S.63 of the Act,

as amended by S.34 of Karnataka Act No.3 of 2013 having already been declared as unconstitutional, void and be not given effect to, it is unnecessary to grant the declaratory relief prayed in these petitions. However, in view of the Order, noticed supra, the impugned panels of auditors vide Annexures-C,

C1 to C16 being arbitrary are quashed. Consequently, the

petitioners shall get their accounts audited, in accordance

with law.

No costs.

Sd/- JUDGE

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