High Court rules in favor of co-op society’s disciplinary power over employees

The Karnataka High Court ruled that the state cannot strip co-operative societies of their right to recruit, transfer, and discipline employees. The court deemed unconstitutional the 2023 amendment to section 128-A of the Karnataka Co-operative Societies Act, 1959, after Uppinangadi Co-operative Agricultural Society and others challenged it.

Justice Anant Ramanath Hegde emphasized that co-operative societies have the fundamental right to manage their employees, highlighting Article 19(1)(c) of the constitution. While the state argued for oversight powers, the court stressed the importance of autonomy, as outlined in Article 43-B.

The court criticized the broad powers granted to the Registrar of co-operative societies, stating that such control infringes on the rights of society members. It maintained that the power to recruit, transfer, and discipline employees is inherent to the functioning of a co-operative society and cannot be delegated to external entities.

By upholding the principle of autonomy, the court affirmed the significance of cooperative societies in fostering economic growth and stability.