Karnataka Co-Operative Societies Act | Right To Vote & Contest Available To Member Does Not Automatically Pass On To Legal Representative: High Court

The Karnataka High Court has held that a nominee or a legal representative of a member of a Co–operative Society, who is admitted as a member after the death of a member, cannot vote and contest in the election to the Board of a Co-operative Society or a general meeting, if he has not completed one year after being admitted as a member.

A single judge bench of Justice Ananth Ramanath Hegde dismissed a petition filed by one Chinnammayya who made a claim to vote at the elections held by Begihalli Milk Producers Co-operative Societies Ltd and challenged the decision of the Society which included her in the ineligible voter's list.

The petitioner contended that she is the wife of late Ramaiah, the past member of the Society and she inherited the membership of the Society under Section 24 of the Karnataka Co-Operative Societies Act, 1959 upon the death of her husband. Thus, she claimed she inherited all the rights of the deceased member. By the time Ramaiah died, he had completed a year as a member of the Society, and had acquired the right to vote and contest in the election. Thus, the wife who inherited shares held by late Ramaiah, is also entitled to vote and contest in the election is the contention, it was contended.

The society contested the claim by submitting that the petitioner's husband died on 19.09.2022. However, the petitioner did not seek the transfer of shares held by her husband for a considerably long period and recently requested to transfer the shares in her name and the Society on 25.02.2023, 'admitted' the petitioner as a member. Since the petitioner has not completed 12 months after being 'admitted' as a member, there is disqualification under Section 20(2)(a-iii) of the Act, 1959 to vote and contest in the election as the member must have completed 12 months as a member to be eligible to vote after being admitted as a member, it was submitted.

Section 24 of the Act reads thus: Transfer of interest on death of a member - (1) On the death of a member of a co-operative society, the society shall transfer the share or interest of the deceased member.

Court said the expressions, “society shall transfer the share or interest of the deceased member'' and “provided that such nominee, heir or legal representative as the case may be, is admitted as a member of the society'' appearing in Section 24 of the Act 1959, will mean 'a decision' on admission as a member is required to be taken.

“Every legal representative or nominee does not automatically become a member of the society, though he may be entitled to share or interest in the capital of Society,” it said.

Court also noted that to be a member upon the death of a member either as his nominee or legal representative, the nominee or legal representative should fulfil the eligibility criteria prescribed to be a member and more importantly should not have any disqualification prescribed under the Act. “Thus, the Co-operative Society will have a say in the matter as to whether the nominee or the legal representative fulfils the eligibility criteria or has any disqualification.”

Court said only after conferment of membership, the legal representative acquires membership in a co-operative society. "Till then, he does not inherit the membership though he inherits the value share and the interest in the share capital. In case, membership is refused, for not fulfilling the eligibility criteria, the legal representative has to encash the value of the share or interest in it and nothing more.”

Taking into account that member's right to vote and contest in the election is statutorily governed under Section 20 of the Act, 1959. Section 20(2)(a-iii) of the Act which prescribes a minimum period of one year as a member of the Society to be eligible to vote and contest in the election, the court said,

“Petitioner is admitted as a member on 25.02.2023. If the contention of the petitioner is accepted that a legal representative of a deceased member automatically acquires all the rights of a deceased member, then Section 20(2)(a-iii) of the Act, 1959 referred to above becomes inapplicable in a claim for membership under Section 24 of the Act, 1959. The language employed in Sections 20, 24 of the Act, 1959, and Rule 11 of Rules, 1960 do not support such contention.”

It held the law seeks to confer the right to vote and contest in an election only to those persons who have completed 12 months to ensure that the person who seeks to vote and contest in the election is familiar with the affairs of the society. "That seems to be the object behind Section 20(2)(a-iii). This being the position, this Court is of the view that Section 24 has to be read along with Section 20(2)(a-iii) and it cannot be read in isolation.”

It added, “If Section 24 is read along with Section 20(2)(a-iii), the inevitable conclusion is right to vote and contest available to a member does not pass on to the legal representative under Section 24 of Act of 1959. It has to be earned by the legal representative by completing 12-months as a member after being admitted as a member.”

Accordingly the court dismissed the petition.

Appearance: Advocate Seenappa K for Petitioner.

AGA Sidharth Babu Rao FOR R1, R3-R5.

Advocate T L Kiran Kumar FOR R2.

Advocate N Ramachandra FOR R6.

Citation No: 2024 LiveLaw (Kar) 101

Case Title: Chinnammayya AND State of Karnataka & Others

Case No: Writ Petition No 1805 OF 2024

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