BENGALURU
The Dharwad Bench of the Karnataka High Court has called for a comprehensive revamp of the Karnataka Cooperative Societies Act, 1959 and its accompanying rules, observing that decades of piecemeal amendments have left the statute fragmented and ill-suited to present-day realities.
Justice Suraj Govindaraj, in his order on filling casual vacancies in a cooperative body in Uttara Kannada district, noted that the cumulative impact of past amendments was never fully assessed, resulting in conflicting and outdated provisions. He observed that while courts have often applied the principle of harmonious construction, legislative reform is the only sustainable remedy when reconciliation fails.
The judge highlighted multiple problem areas—membership rights and disqualifications, election procedures, appointment of administrators, overlapping jurisdictions, and audit obligations—many of which have been rendered obsolete by technological and socio-economic changes. Cooperative societies, he added, face redundant compliance requirements, often duplicating those mandated under the Companies Act, 2013.
Justice Govindaraj emphasized that, similar to the comprehensive revamp of the Companies Act, a modernized cooperative law is essential to promote transparency, efficiency, and constitutional autonomy under Article 43B. Without such reform, cooperatives would remain mired in unproductive litigation, undermining their goal of economic and social empowerment. Drawing a parallel, he noted that the Income Tax Act, 1961 is being replaced by the Income Tax Act, 2025—effective April 1, 2026—due to excessive amendments over six decades that made the earlier law overly complex.