Kerala HC- Citizens Fundamental Rights Cannot Be Claimed By Cooperative Society

Overview

• On 28 April 2021, the Kerala High Court upheld the Ordinances amending the Kerala Cooperative Society Act to merge District Cooperative Banks in the state with the Kerala State Cooperative Bank.

What is the background

• The Kerala Co-operative Society proposes a system at three levels, primary, district, and state.
• The Kerala government after consultation thought of changing the structure because the state, as well as district levels, were adding to the cost without providing any significant benefits to the lower tier.
• An Ordinance was passed amending Section 14 of the Act to amalgamate the District and the State banks.
• Multiple cases were filed concerning the amendment made to, The Kerala Co-operative Societies Act, 1969, some in favor and some against.

Arguments against the amendment

• The Ordinance is sought to be struck down on the ground that, a) the introduction of the Ordinance is beyond the legislative competence of the State, b) arbitrary and unreasonable under Article 14, c) violative of the rights provided to the petitioners under Article 19(1)(c) of the Constitution and the rights which are required to be protected under Article 43B of the Constitution of India.
• The repeated re-promulgation of the ordinance without laying it in front of the legislature is another ground on which the ordinance is sought to be invalidated.

The question faced by the Court

• The question which requires a resolution in these writ petitions concerns the constitutional validity of the amendment brought in, The Kerala Co-operative Societies Act, 1969, by Ordinance no.6 of 2020, promulgated by the Governor of Kerala in the exercise of powers conferred through Article 213 of the Constitution of India.
• Also, is allowing the amalgamation without it being a voluntary act of the parties infringe the Fundamental Right to associate, which is provided under Article 19 (1) (c) of the Constitution of India.

What does Kerala High Court say

• The Judgment, in this case, was passed by Justice Raja Vijayaraghavan.
• The Honorable Court, regarding the infringement of Article 19 (1) (c) said that it is a different thing to say that a citizen can form a society and another thing to say that a member society has a right to form a central society.
• The Court also said that a cooperative society is not a citizen that it has guaranteed Fundamental Rights and also even citizens have no Fundamental Right to be a member of society. This Right of a citizen is governed by the Act, Rules, and bye-laws co-operative societies are governed by statute, and therefore there can be no objection to statutory interference in their composition on the ground that it is a violation of the right of freedom of association of an individual.
• The Court also pointed out to Entry 32 of List II read with the Ninth Schedule and said that State is empowered to legislate on the subject of Co-Operative societies.
• The Court also said that the amendment will further the spirit behind the cooperative societies because there will be no middle-tier which will allow the farmers to approach the apex body directly.
• The Court also said that there is no prima facie arbitrariness and unreasonableness appears to me. The Ordinance has adopted the classification on a sound and intelligent basis.
• Lastly, the Honorable High Court of Kerala upheld the amendment of, The Kerala Co-operative Societies Act, 1969, and ordered the amalgamation of the Malappuram Cooperative Bank with the Kerala Bank.

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