Compliance with Mandatory Section 12(2) Procedure Is Prerequisite for Compulsory Amendment of Society Bye-Laws

The petitioner is a Co-operative Society registered in 1996.

In 2000, its territorial jurisdiction was extended to include various rural areas (Gram Vicharpur, Jaghara, etc.) to operate Fair Price Shops.

Following a complaint of irregularities in 2019, the Registrar initiated proceedings under Section 12 of the M.P. Co-operative Societies Act, 1960, to amend the Society’s bye-laws and curtail its jurisdiction.

Despite the Society’s General Body unanimously opposing the amendment on 12/08/2020, the Registrar passed an order on 21/08/2020 limiting the Society’s operations solely to Municipal Wards 29 and 30.

The Society’s subsequent appeals to the Joint Registrar and the M.P. State Cooperative Tribunal were dismissed.

The petitioner challenged these orders via the present writ petition, alleging violation of mandatory statutory procedures.

1. Whether the Registrar followed the mandatory procedure contemplated under Section 12 of the M.P. Co-operative Societies Act, 1960, prior to amending the petitioner Society's bye-laws

Section 12 of the M.P. Co-operative Societies Act, 1960, which mandates that the Registrar must first provide a 60-day notice to the Society to make a "necessary or desirable" amendment.

Under Section 12(2), if the Society fails to comply, the Registrar can only register the amendment after (a) giving the Society an opportunity of being heard and (b) soliciting the opinion of the notified Apex Federal Society.

The court relied on State of Maharashtra v. Karvanagar Sahakari Griha Rachana Sanstha Maryadit, (2000) 9 SCC 295, which held that the "interest of the society" is the paramount consideration for such amendments.

Jawaharlal Nehru Sahkari Agriculture Produce Processing Society Ltd. v. State of M.P. (W.A. No. 182/2017), which established that seeking the opinion of the Apex Federal Society is a mandatory prerequisite.

The court found that the Registrar failed to adhere to the mandatory statutory framework of Section 12.

Although a show-cause notice was issued, the Registrar did not record a specific finding that the curtailment of jurisdiction was "necessary or desirable in the interest of the society".

Critically, the court observed that the Registrar failed to solicit the opinion of the Apex Federal Society before registering the amendment, a requirement the court deemed mandatory.

While the respondents argued the Society was not affiliated with an Apex body, the petitioner produced evidence (Annexure-RJ/2) demonstrating active participation in Federal Society proceedings.

The court reasoned that the lower authorities and the Tribunal erred by ignoring these procedural lapses and failing to consider that the Society’s General Body had expressly rejected the proposed amendment.

Consequently, the High Court quashed the Registrar's order dated 21/08/2020, the appellate order dated 13/01/2021, and the Tribunal’s order dated 09/05/2025.

The petition was allowed, granting the authorities liberty to pass fresh orders only if they comply strictly with the prescribed legal procedures.