Legal Article on Writ Jurisdiction Against Co-operative Societies in India

The Writ Jurisdiction over Co-operative Societies in India: A Labyrinth of Public Duty and Private Autonomy

I. Introduction

The question of maintainability of a writ petition under Article 226 of the Constitution of India against a co-operative society has been a subject of perennial judicial deliberation. Co-operative societies, fundamentally creatures of statute, occupy a unique space between private voluntary associations and entities imbued with public character. This inherent dichotomy has led to a complex and often conflicting body of jurisprudence. The central legal conundrum revolves around whether a co-operative society can be classified as ‘State’ under Article 12 of the Constitution, or alternatively, whether the nature of its functions or statutory obligations renders it amenable to the extraordinary writ jurisdiction of the High Courts. This article seeks to critically analyze the legal principles governing the issuance of writs against co-operative societies in India, tracing the evolution of judicial thought through landmark Supreme Court and High Court decisions. It will dissect the foundational tests of ‘State instrumentality’ and the ‘public function’ doctrine, examine the specific context of service-related disputes, and evaluate the impact of available alternative statutory remedies on the exercise of writ jurisdiction.

II. The Foundational Dichotomy: Co-operative Societies as ‘State’ under Article 12

The primary gateway for invoking writ jurisdiction is to establish that the respondent entity falls within the definition of ‘State’ under Article 12 of the Constitution. The judiciary has generally held that a co-operative society, merely by virtue of its registration under a Co-operative Societies Act, does not become a statutory body or an instrumentality of the State.

A. The Distinction: Creation 'By' versus 'Under' a Statute

A crucial distinction, articulated by the Supreme Court, lies between a body created *by* a statute and one that is merely formed *under* a statute. A statutory body owes its very existence to the statute, whereas a co-operative society is a body corporate formed by the voluntary association of its members, which is then registered in accordance with the provisions of a governing Act. In S.S Dhanoa v. Union Of India (1991 SCC 3 567), the Supreme Court, while examining a society registered under the Societies Registration Act, clarified that such a body is not created by the statute but is merely governed by it. This logic has been consistently applied to co-operative societies. As the Madras High Court noted in Philip Jeyasingh v. The Joint Registrar Of Co-Operative Societies (1992), a co-operative society is "a body created by an act of a group of individuals in accordance with the provisions of a statute," not by the statute itself. The Supreme Court in Thalappalam Service Cooperative Bank Ltd. v. State Of Kerala (2013 SCC 16 82) reinforced this, holding that mere supervision or regulation by the Registrar of Co-operative Societies does not transform a society into a public authority.

B. The 'Instrumentality of the State' Test

Notwithstanding the general rule, a co-operative society can be deemed an instrumentality of the State if it satisfies the tests of deep and pervasive state control. The Supreme Court, in cases like Ajay Hasia v. Khalid Mujib Sehravardi (1981), laid down criteria such as state financial control, functional control, administrative control, and whether the body performs functions of public importance. The application of this test to a co-operative society was decisively affirmed in U.P State Cooperative Land Development Bank Ltd. v. Chandra Bhan Dubey (1999 SCC 1 741). The Court held the appellant bank to be a ‘State’ under Article 12, reasoning that:

  • The bank was constituted under a specific state Act.
  • Key managerial personnel, including the Managing Director, were state employees on deputation.
  • The State Government had significant control over its financial operations and service regulations.

This case stands as a prime example where the corporate veil of a co-operative was pierced to reveal its true character as an arm of the state. However, this is an exception rather than the rule. The threshold for establishing such pervasive control is exceedingly high. In Federal Bank Ltd. v. Sagar Thomas (2003 SCC 10 733), the Supreme Court clarified that mere regulatory oversight by a body like the Reserve Bank of India over a private bank does not make it a ‘State’. Similarly, in Thalappalam, the Court held that unless a society is substantially financed, owned, or controlled by the government, it remains outside the purview of a ‘public authority’.

III. The Public Function and Statutory Duty Doctrine: An Alternative Gateway

Even where a co-operative society is not held to be ‘State’ under Article 12, a writ petition may still be maintainable under the expansive "for any other purpose" clause of Article 226. This jurisdiction is invoked when the society fails to perform a public or statutory duty.

A. Enforcement of Statutory Duties

The most widely accepted ground for issuing a writ against a co-operative society is for the enforcement of a statutory duty. A writ of mandamus can be issued to compel a society to perform a duty imposed upon it by the Co-operative Societies Act, the rules framed thereunder, or its own bye-laws, which derive their force from the statute. The Madhya Pradesh High Court in Ramswarup Gupta v. M.P State Co-Operative Marketing Federation Ltd. (1976) articulated this principle clearly:

"Whenever, there is a statutory requirement directing the Society to perform the same, and if the Society does not obey it and acts in violation of the same, the person who comes to the Court claiming a writ does not come for the performance of the contract of service, but virtually comes for the enforcement of his legal rights, created in his favour by virtue of the provisions of the Statute..."

This view has been echoed by numerous High Courts and was crystallized by the Full Bench of the Madras High Court in K. Marappan v. The Deputy Registrar Of Co-Operative Societies (2006 SCC ONLINE MAD 886). The Bench concluded that while a writ is not maintainable as a matter of course, it can be issued where a society fails to perform a statutory duty, including adherence to principles of natural justice if statutorily mandated.

B. The Public Function Test and Its Limitations

The amenability of a private body to writ jurisdiction can also arise if it performs a public function. However, the scope of this doctrine has been significantly circumscribed. The Supreme Court in ST. MARYS EDUCATION SOCIETY v. RAJENDRA PRASAD BHARGAVA (2022 SCC ONLINE SC 1091) delivered a clarifying judgment. It held that even if a private body (in this case, an unaided educational institution) performs a public function, a writ is maintainable only if the dispute involves a *public law element*. A dispute arising purely from a private contract of service, such as termination of employment, is a matter of private law and cannot be adjudicated in a writ petition. This principle directly impacts the maintainability of writs against co-operative societies, especially in service matters. The duty must be owed to the public at large, not merely to the society's own members or employees (Kisan Sahkari Chini Mills Ltd. v. Rakesh Chandra Gangwar, 2004).

C. Service Matters: A Contested Terrain

Disputes relating to the employment of staff are the most frequent subject of litigation against co-operative societies. The general judicial consensus, following the principles laid down in Federal Bank and ST. MARYS EDUCATION SOCIETY, is that service conditions in a co-operative society are governed by a private contract of employment. Therefore, remedies for wrongful dismissal or other service grievances lie in common law or before forums created under industrial disputes legislation, not in a writ petition. However, a crucial exception exists. If the dismissal or adverse action is in direct contravention of a mandatory provision of the Co-operative Societies Act, the Rules, or a bye-law having the force of law, a writ may lie. In such a scenario, the court's intervention is not to enforce the contract of service but to quash an action that is statutorily illegal or ultra vires.

IV. The Bar of Alternative Remedy

A significant practical hurdle in maintaining a writ against a co-operative society is the doctrine of alternative remedy. High Courts, exercising their discretionary power under Article 226, are generally reluctant to entertain a petition when an equally efficacious alternative remedy is available to the aggrieved party under the statute itself. The Co-operative Societies Acts of various states provide for mechanisms like arbitration, revision, or appeal to the Registrar or a specialized tribunal for the resolution of disputes. The Kerala High Court in K.C John v. Liquidator (2005) and Meenachil Rubber Marketing & Processing Co-Operative Society Ltd. (2018) emphasized that parties should not be allowed to bypass these statutory channels. This self-imposed restraint is, however, not absolute. A writ may still be entertained in exceptional circumstances, such as when the impugned order is passed without jurisdiction, in violation of the principles of natural justice, or where the alternative remedy is not truly efficacious.

V. Conclusion

The law on the maintainability of a writ petition against a co-operative society is nuanced and context-dependent. A writ does not lie as a matter of right. The judicial landscape reveals a clear framework: a writ is maintainable only under two principal conditions. First, if the society in question, due to deep and pervasive state control, qualifies as an ‘instrumentality of the State’ under Article 12, a test which is stringently applied and rarely met. Second, and more commonly, a writ of mandamus may be issued against any co-operative society, irrespective of its status under Article 12, to compel the performance of a public or statutory duty imposed upon it by law. For service-related disputes, the door to writ jurisdiction is largely closed, as they are considered private contractual matters, unless the challenged action constitutes a flagrant violation of a mandatory statutory provision. The jurisprudence, therefore, carefully balances the need to uphold the private and autonomous character of co-operative societies, as affirmed in cases like Zoroastrian Coop. Housing Society Ltd. v. District Registrar (2005 SCC 5 632), with the constitutional imperative to ensure that no entity, public or private, that is vested with a statutory duty, is allowed to act in contravention of the law.