1. These petitions under Article 226 of the Constitution have been referred to a Division Bench.
2. This is the second round of litigation challenging amalgamation of cooperative societies. In. these petitions, originally the validity of Karnataka Ordinance No. 2 of 1978 had been impugned. Since that Ordinance has been replaced by the Karnataka Co-operative Societies (Amendment) Act, 1978 (Karnataka Act No. 14 of 1978) (hereinafter, referred to as the Amendment Act), the prayer in most of these petitions, has been amended so as to impugn the validity of the. Amendment Act. In some of these petitions, the constitutionality of Section 14-A of the Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as the Act), has also been impugned.
3. Before dealing with the rival contentions of learned counsel, it is necessary to set out the historical background of the impugned Amendment Act,
4. After the formation of New State of Mysore (Karnataka) on re-organization of States, a uniform law governing co-operative societies throughout the new State, was brought about by the Act. Section 14 of the Act provides, inter alia, for voluntary amalgamation of two or more co-operative societies. Subsequently, Section 14-A was inserted in the Act by the Karnataka Co-operative Societies (Amendment) Act, 1975. That section confers power on the Registrar of co-operative societies (hereinafter referred to as the Registrar) to direct, inter alia, amalgamation of co-operative societies. That section, as it stood originally, provided for consultation of the societies concerned before directing their amalgamation.
5. An expert study group was appointed by the Reserve Bank of India to examine the structure of agricultural credit in rural areas. After this study group gave its report, the Government of India appointed another expert Committee called 'Shivaraman committee, which recommended that co-operative societies in the rural are as would be chosen as the principal agency for meeting the credit needs of agriculturists.
6. In the statement of objections filed on behalf of the state in the earlier batch of writ petitions challenging amalgamation of co-operative societies, It has been stated thus:
'In the State of Karnataka there were about 8500 rural agricultural co-operative credit societies Out of them only 2500 societies were viable and the remaining about 6000 societies were not viable. As many as about 1175 societies were deft met or not functioning effectively. In order to make co-operative credit societies to function effectively the Government felt that re-organization of such societies was necessary. In order to achieve this object Section 14-A of the Act was amended by the Karnataka Co-operative Societies (Amendment) Ordinance, 1976 which was replaced by the Karnataka Co-operative Societies (Amendment) Act, 1976. By this amendment, sub-section (1) of Section 14-A was substituted by a new sub-section. Sub-sections (2) and (4) of that Section we're deleted by such amendment.'
7. Section 14-A of the Act was further amended by the Karnataka Co-operative Societies (Second Amendment) Act, 1976 by substituting a new section which reads as follows.
14-A. (1) Notwithstanding anything contained in this Act or the rules made there under and the bye-laws of the cooperative societies concerned, where the Registrar is satisfied that it is essential in Public interest or in the interest of cooperative movement or for the purpose of securing the proper management of any co-operative society that any two or more co-operative societies should be amalgamated to form a single co-operative society or any co-operative society should be divided or any co-operative society should be reorganised, then, the Registrar shall order' the amalgamation, division or reorganisation of such co-operative societies.
(2) The order shall all
(a) Provide for the devolution of the assets and liabilities of the co-operative society or societies amalgamated, divided or reorganised, and the date an which the devolution takes effect;
(i) the composition, strength names and the term of office of the members (including the Chairman) of the first committee;
(ii) who shall be the Managing Director/Secretary, of the new co-operative society or each of the new co-operative societies, as the case may be; and
(iii) the bye-laws which the new cooperative society or each of the new cooperative societies shall,, until amended in accordance with the provisions of the Act and the rules, follows.
(3) Every such order shall be published in the Official Gazette and shall, unless otherwise specified in the order come into force on such publication.
(4) The order referred to in sub-section (1) may contain such incidental, consequential and supplemental provisions as may in the opinion of the Registrar, be necessary to give effect to amalgamation, division or re-organization, as the case may be.
8. Section 8 of the Second Amendment Act of 1976 validated all orders made under sub-section (1) of Section 14-A of the Act prior to the date of that Imprudent Act.
9. The Deputy Registrars of co-operative societies issued orders amalgamating a large number of groups of cooperative societies. Such orders of amalgamation were impugned in a batch of large number of writ petitions. As the constitutionality of Section 14-A of the Act was also challenged in those petitions, they were heard by a Bench of five Judges of this court as provided by Article 228-A of the constitution. The decision of that Bench has been reported in Puttappa v. State of Karnataka : AIR1978Kant148 (FB). The majority decision of that Bench, was delivered by Jagannatha, Shetty, J., and the minority decision, by Malimath, J. the net result of the majority decision and the minority decision, was summarised by that Bench as follows:
(i) It is unanimously held that S. 14-A of the Karnataka Co-operative Societies Act, 1959 is within the - competence Of the State Legislature under Entry 32 of List II of V11th Schedule to the Constitution.
(ii) it is unanimously held that Section 14-A of the Act is not void as of fending Article 14 of the Constitution.
(iii) It is held in accordance with the majority opinion (Jagannatha Shetty, Bopanna & Venkatachala, JJ.) that Section 14-A is not void as offending Article 19(1)(c) of the Constitution. It is held in the minority judgment (Malimath & Srinivasa Iyengar, JJ.) that Section 14-A is void as offending Art. 19(1)(c) of the Constitution.
(iv) It is held by Malimath and Srinivasa Iyengar, JJ- that Section 14-A is not void as offending Art. 31(1) Or Art 31(2) of the Constitution.
(v) It is held in accordance with the majority opinion Vagannatha Shetty, Bopanna and Venkatachala JJ.) that the principle of audi alteram partem has to be followed while exercising power under Section 14-A of the Act and that the impugned orders made under the said provision are void they having be' made in contravention of the said principle. Malimath and Srinivasa Iyengar JJ. have, in their minority judgment, held that the Legislature has, by necessary implication, excluded the principle of Audi alter am Pattern.
(vi) It is held by Malimath and Srinivasa Iyengar, JJ., that the impugned orders have to be quashed on the ground that the same have been made by the Deputy Registrar in a mechanical manner and without applying their minds.
(vii) In the result, the orders of the Deputy Registrars, merging co-operative societies which had been impugned in those writ petitions, were quashed.
10. After the aforesaid decision of this court in Puttappa's case : AIR1978Kant148 (FB), Section 14-A of the Act was amended by Karnataka Ordinance No. 2 of 1978 by inserting a new sub-section, namely, sub-section (1-A) in that section. The Ordinance was subsequently replaced. by the Amendment Act, the Karnataka Co-operative Societies (Amendment) Act, 1978. That sub-section reads:
(I-A) Before making an order under sub-section (1) it shall not be necessary for the Registrar or any other officer to give any co-operative society or person likely to be affected by such order an opportunity of making representation or of being heard.
11. Section 3 of the Amendment Act which seeks to validate orders of amalgamation, division or reorganisation of co-operative societies, made under Section 14-A of the Act before the commencement of the Amendment Act, reads:
Notwithstanding anything contained in any judgment, decree or order of any court or other authority, no order, of amalgamation, division or reorganisation of co-operative societies made under Section 14-A of the Principal Act by the Registrar or any other officer prior to the commencement of this Act shall be deemed to be Invalid or to have become invalid only on the ground that the said order was made without authority or without giving an opportunity of being heard to the affected co-operative societies or persons and all orders of amalgamation, division or re-organization of co-operative societies so made before the commencement of this section shall be deemed to be valid and effective as if they had been made in accordance with the provisions of the principal Act as amended by this Act and the Karnataka Ordinance 7 of 1977 and accordingly, all orders issued, things done, proceedings or action taken,
(a) by the Registrar or by any other officer for the amalgamation, division or re-organization of co-operative societies. or
(b) by the amalgamated, divided or reorganised co-operative societies shall, for all purposes, be deemed to be and to have always been issued, done or taken in accordance with law.
12. In effect the Amendment Act expressly dispensed with the requirement of hearing the co-operative societies which were sought to be amalgamated. The orders of the Deputy Registrars amalgamating co-operative, societies which had been struck down by the Bench of five Judges, are sought to be validated by the Amendment Act.
13. As stated earlier, the constitutionality of the Amendment Act has been challenged in these petitions.
14. The first contention of learned counsel for the petitioners, was that it is not competent for the Legislature to nullify the judgment of a court by declaring as valid an order which has been quashed by the court. Support for this contention was sought to be derived from the following observations of the Supreme Court in Ahmedabad Corporation v. New Shrock Spinning and Weaving Co. Ltd. : 1SCR288 .
'The position of a legislature is however different. It cannot declare any decision of a court of law to be void or of no effect. '
But in the aforesaid decision itself the Supreme Court has referred to its earlier decision in Prithvi Cotton Mills Ltd. v. Broach Borough Municipality : 79ITR136(SC) wherein the Supreme Court has elucidated the scope of the power of the legislature to validate acts 'and orders struck down by courts, Hidayatullah, C. J., who spoke for the court, said thus at page 195.
'When a legislature sets out to validate a tax declared by a court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the legislature must possess the power to impose the tax for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to -declare merely that the decision of the court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the legislature does not possess or exercise. A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds or illegality are capable of being removed and are in fact removed and the tax thus made legal ................. ................ ............... .............. ...................... ................. ................ ....... ............... ............. .........
If the legislature has the power over the subject-matter and competence to make a valid law, it can at any time, make such a valid law and make it retrospectively so as to bind even past transactions.'(Underlining is ours)
15. As explained by the Supreme Court in Rajkumar v. Union of India : 3SCR963 , once a law is given retrospective effect as from a particular date all actions taken under the Act after that date, but before the amendment was made., would be deemed to have been taken under that Act, an amended, and there Is really no question of having to validate any action already taken, provided it is subsequent to the date from which the amendment is given retrospective effect.
16. The only ground on which this court in Puttappa's cage : AIR1978Kant148 (FB) declared the orders of the Deputy Registrars amalgamating cooperative societies as invalid, was that the principle of Audi alter am partem had not been followed by the Deputy Register while exercising the power under Section 14-A of the Act. By its majority decision the Bench of five Judges held that though there was no express Provision in Section 14-A of the Act to that effect, the Deputy Registrars should have heard the concerned co-operative societies before making the orders amalgamating those societies.
17. As stated earlier, sub-section (1A) inserted by the Amendment Act in Section 14-A, seeks to dispense with the necessity of hearing the concerned cooperative societies before making an order amalgamating them. Thus, the ground on which the orders of the Deputy Registrars amalgamating co-operative societies, had been declared to be invalid, was removed by sub-section (1A) and the orders of -the Deputy Registrars which were held to be invalid, are sought to be validated by Section 3 of the Amendment Act. As the ground for Invalidating the orders of the Deputy Registrars, was removed by retrospective amendment of Section 14-A by insertion of sub-section (1A) therein, the orders of the Deputy Registrars which had been quashed in Puttappa's case, have been validated and the decision of this court in Puttappa's case has been rendered in- We are unable to accept the contention of learned counsel that the Amendment Act is invalid as it seeks to nullify the decision of this court in Puttappa's case.
18. It was next contended by learned counsel that the principle of audi alteram pattern embodies a well accepted principle of natural Justice and that if the application of that principle is dispensed with, the provisions of See. 14-A of the Act providing for amalgamation of co-operative societies, should themselves be regarded as invalid. In other words, the contention of learned counsel for the petitioners was. that if Legislature makes any law dispensing the application of audi alteram patterm, such law itself becomes void.
19. A complete answer to the above contention is contained in the following decision of the Supreme Court in Union of India v. J. N. Sinha : (1970)IILLJ284SC . There, Hegde, J., who spoke for the court, observed thus
at page 42:
'Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. As observed by this court in Kraipak v. Union of India, : 1SCR457 , 'the aim of rules of natural justice is to secure Justice or to put it negatively to Prevent miscarriage, of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law but supplement it'. It is true that if a statutory provision can be read consistently with the principles of natural justice, the courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice. But, if on the other hand, a statutory provision either specifically or by necessary implication excludes the application of any or all the rules of principles of natural justice, then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned Provision the principles of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or n depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power.'
(Underlining is ours)
From the aforesaid enunciation by the Supreme Court, it is clear that the principles of natural justice do not have the status of a fundamental right and it is competent for the legislature to abridge or totally, dispense with their application to any particular proceeding or class of proceedings. As stated in Halsbury's Laws of England (Fourth Edition) Volume 1, at page 90, para 74, the rule of natural justice will not apply where Parliament has evinced an Intention to exclude its operation either by conferring on the competent authority unfettered discretionary power or by expressly providing for notice and opportunity to be heard for one purpose, but omitting to make any provision for another purpose.
20. Even so, it was contended by learned counsel for petitioners that it was on account of the existence of the safeguard of hearing the affected cooperative societies before making an order of amalgamation, this court held in Puttappa's case : AIR1978Kant148 (FB) that the conferment of power on -the Registrar or Deputy Registrar under Section 14-A of the Act was not unguided or arbitrary and 'that if the application of the principle audi alteram partem, is dispensed with, that power becomes arbitrary.
21. On an examination of the scheme of the Act and the provisions thereof, this court held in Puttappa's case that the conferment of power under S. 14-A of the Act, was not uncontrolled or unguided and that the section contained sufficient guidelines for exercise 'of such power. If there are such guidelines, we do not see how that power can be said to be uncontrolled or unguided merely because the obligation to hear the concerned societies is dispensed with. Thus, we are unable to accept the contention of learned counsel for the petitioners that the insertion of sub-section (1A) in Section 14-A has rendered the section Invalid an the ground of conferment of uncontrolled or unguided power on the Registrar and Deputy Registrars.
22. Some of learned counsel for petitioners contended that the orders of the Deputy Registrars amalgamating co-operative societies, were invalid because such orders were passed without application of the mind of the respective Deputy Registrars and without Mowing the guidelines contained in See. 14-A of the Act or the guidelines indicated by the Reserve Bank of India. - Learned counsel for the petitioners invited our attention to the penultimate para in the order of Malimath, J. in Puttappa's case in which his Lordship said thus:
'As I am satisfied that the impugned orders have been passed mechanically and without the application of the mind of the Deputy Registrars, the some are liable to be quashed.'
23. Learned counsel for the petitioners maintained that though the order of Malimath, J., in Puttappa's am : AIR1978Kant148 (FB) was a minority one, that part of his order wherein he held that the Impugned orders had been passed. without the application of the mind and were liable to be quashed, should be treated an the decision of entire Bench of five Judges since the majority of Judges did not express any view an that point In other words, the contention was that the decision of the Judges who are in a minority in a Bench an a point on which the majority of Judges of that Bench have not expressed any view, should be regarded as decision of the Bench. In support of this contention reliance was placed on the following observations of Vaidialingarn, J., in V. Padmanabha v Deputy Tahailder, Mittur : AIR1963Ker155 :
'No doubt, this contention has bow noted by his Lordship the child Justice
of the Supreme Court in the earlier decision, but the majority have not expressed view of this aspect and they have assumed that the State Legislature. had the necessary competence to enact the Land Tax Act, 1955.
But, Mr. Justice Sarkar, in his dissenting judgment, has referred to this aspect and has ultimately held that under Entry 49 taxation of land on which a forest stands is permissible and legal. Inasmuch as there has been no adjudication by the majority an this aspect, I am bound by the decision of Mr. Justice Sarkar on this aspect and I have -to hold that the contention of the petitioners regarding the competency of the legislature to enact the measure in question, if the Act is otherwise valid, has to be reject
24. On the other hand, the learned Advocate General contended that where the minority of Judges of a Bench decide any question of law, that decision cannot be regarded as the decision of the Bench and therefore binding even if the majority of Judges of that Bench have not dissented from that view, but have remained silent on that question. In support of his contention the learned Advocate General relied on the following observations of the Supreme Court in John Martin v. State of West Bengal : 1975CriLJ637 :
'This contention was sought to be supported by reference to certain observations of Fazal Alt J., and Mahajan, J., in A. K. Gopalan v. State of Madras : 1950CriLJ1383 . Now it is true that Fazal Ali, J. observed in this case .................. But we do not think that these observations made by two out of six learned Judges can be regarded as laying the law on the point.'
(Underlining is ours)
On the basis of the aforesaid observations of the Supreme Court, the learned Advocate General contended that the decision of Malimath, J., (with whom Srinivasa Iyengar J., concurred) that the impugned orders of amalgamation of cooperative societies had been passed mechanically and without application of the minds of the respective Deputy Registrars, could not be regarded as the decision of the Bench of five Judges. The learned Advocate General maintained that the above decision of the minority of Judges of the Bench in Puttappa's case : AIR1978Kant148 (FB) cannot be regarded as laying down the law which is binding on us.
25. On the other hand, Shri Kadilal Manjappa, learned counsel for some of the petitioners, submitted that in A. K. Gopalan's case the opinion of Fazal Ali, J., and Mahajan, J., that the representation of the detenu should necessarily be considered by an independent body, had been expressly dissented from by the majority of the Judges of the Bench which decided that case. Sri Manjappa pointed out that in para 24 of the report of the case in : 1950CriLJ1383 , Kania, C. J., observed that if the law made by the Parliament in respect of preventive detention is silent as to the person to whom a detained person should make a representation, it does not mean that such law is invalid. In pars. 121 of the report, Pataniall Sastri, J., (as he then was) observed that the petitioner could not claim to have his case judged by any other impartial tribunal. In para 245 of the report, Das, J., (as he then was), observed that there was no provision for any trial before any tribunal and that one could not import a condition of a trial by any tribunal .
26. It appears to us that Sri Manjappa is right in his submission that the majority of the Judges of the, Bench of the Supreme Court which decided Gopalan's case, had dissented from the aforesaid view expressed by Fazal Ali, J., and Mahajan, J. The dictum of the Supreme Court that the observations made by the minority of the Judges of a Bench on a point of law, cannot be regarded as laying down the law on that point, has not been qualified by saying that it is so only when the majority of Judges of the Bench have dissented from the observations made by the minority of Judges. Hence, we are bound by the dictum of the Supreme Court that the observations made by the minority of the Judges of a Bench on a point, cannot be regarded as laying down the law on. that point. The dictum of Vaidialingam, J., in V. Padmanablia's case : AIR1963Ker155 that where there is no adjudication by the majority of Judges on a point of law, the High Court is bound by the decision of the minority of Judges, would, in our opinion, apply only to the decisions and observations of the minority of Judges of the Supreme Court and not to those of the minority of Judges of High Courts.
27. Hence, the decision of Malimath, J. (with whom Srinivasa Iyengar, J., concurred)that there was no application. of the minds of the Deputy Registrars before making the impugned orders of amalgamation of co-operative societies, cannot be regarded as the decision of the Bench of five Judges and is not binding on us. In our opinion, the question whether there was such application of the minds of the respective Deputy Registrar, has to be examined in each of these petitions in which such contention has been raised. Accordingly, we requested the learned Government Advocate to produce before us the materials which the respective Deputy Registrar considered while deciding the question whether amalgamation of co-operative societies, was necessary in public interest.
28. In W.P. No. 8108 of 1978, the amalgamation of Service Co-operative Society, Bennekal with another co-operative society has been impugned The learned Government Advocate has pointed out that Deputy Registrar of Co-operative Societies, Bellary, had ordered that society to be wound up. That order has not been impugned. When that society has been ordered to be wound up, Its amalgamation with another society cannot be said to be bad.
29. In W. Ps. Nos. 7371 and 7515 of 1978, the amalgamation of Kempanapalya Service Ca-operative Society and Handrabalu Service Co-operative Society with certain other co-operative societies in Kollegal Taluk, has been impugned. The learned Government Advocate has produced the working sheets maintained by the Deputy Registrar of Co-operative Societies in Mysore District. In these working sheets are found the numbers of villages served by co-operative societies, the population of such villages, the area of cultivable lands in each of such villages and the extent of credit provided by these co-operative societies. Hence, it can reasonably be inferred that the said Deputy Registrar had applied his mind to the relevant data before deciding which co-operative societies should be merged to make them viable.
30. In W. Ps. Nos. 79M and 8379 of 1978, the amalgamation of certain co-operative societies with certain other cooperative societies in Chintamani Taluk in Kolar District, has been impugned. The learned Government Advocate produced before us similar working sheets maintained by the Deputy Registrar of Co-operative Societies in Kolar District. In these petitions also, we hold that there was application of the mind of the concerned Deputy Registrar while making the order for amalgamating these co-, operative societies
31. In W. P. No. 7581 of 1978, the amalgamation of Service Co-operative Society, Halika, Mudigere Taluk, with certain other co-operative societies, has been challenged. The learned Government Advocate has produced the working sheets maintained by the Deputy Registrar of Co-operative Societies in Chikmagalur District. It is seen from those working-sheets that the said Deputy Registrar has examined the relevant data. Hence, the order of amalgamation cannot be said to be vitiated on account of non-application of the mind of the concerned Deputy Registrar.
32. In W. P. No. 7503 of 1978, the amalgamation of Service Co-operative Society, Babalad, with certain other societies, has been impugned. The learned Government Advocate has pointed out that that society has been ordered to be wound up. When that Society has been found to be not capable of continuing its existence, its amalgamation with another society cannot be held to be bad.
33. In W. P. No. 8396 of 1078, the amalgamation of Service Co-operative Society, Madenahalli Gubbi Taluk, with certain other co-operative societies, has been impugned. The learned Government Advocate pointed out that Kamath Committee which examined the affairs of that Society, had opined that it could function independently and that the Deputy Registrar of Co-operative Societies in Tumkur District had not given any reason for ordering its amalgamation with other societies. But in this petition, the only relief sought for by the petitioner is to declare Karnataka Ordinance No. 2 of 1978 as unconstitutional. But there is no prayer for quashing the order of the Deputy Registrar amalgamating that society with other societies.
34. In the result, we dismiss all these petitions.
35. In the circumstances of these petitions, we direct the parties to bear their own costs.
36. Petitions dismissed.