Ram Chandra Choudhary & Orsv.Roop Nagar Dugdh Utpadak Sahakari Samiti Limited & Ors

Legal Analysis: Ram Chandra Choudhary & Ors. vs. Roop Nagar Dugdh Utpadak Sahakari Samiti Limited & Ors

Citation: 2026 INSC 347

Court: Supreme Court of India

Coram: Justice B.V. Nagarathna and Justice R. Mahadevan (Two‑Judge Bench)

Judgment Author: Justice R. Mahadevan

Date of Decision: April 10, 2026

Nature of Judgment: This is a judgment by a Two‑Judge Bench of the Supreme Court in its civil appellate jurisdiction, arising from a Special Leave Petition against a judgment of the Rajasthan High Court. The Court allowed the appeal, set aside the High Court’s judgment striking down certain bye‑laws of District Milk Unions, and held that the bye‑laws were within the statutory power, did not create disqualifications but prescribed eligibility conditions, and that the writ petitions were not maintainable due to alternative statutory remedies and non‑joinder of necessary parties.

1. Synopsis of the Judgment

The respondents (Primary Milk Societies) filed writ petitions challenging certain bye‑laws of District Milk Unions in Rajasthan that prescribed eligibility conditions for contesting elections to the Board of Directors (e.g., minimum milk supply, operational continuity, audit classification). The Single Judge and Division Bench of the High Court struck down the bye‑laws as ultra vires. The appellants (Chairpersons of various District Milk Unions), who were not parties to the writ proceedings, appealed. The Supreme Court held that: (i) the writ petitions were not maintainable as co‑operative societies are not “State” under Article 12 and an efficacious statutory remedy exists under the Rajasthan Co‑operative Societies Act, 2001; (ii) the impugned bye‑laws were within the rule‑making power under Section 8 read with Schedule B (Clauses da and v); (iii) the bye‑laws prescribed eligibility conditions, not disqualifications, and did not violate Section 28; (iv) the High Court erred in striking down bye‑laws of societies not impleaded, violating natural justice. The appeal was allowed, and the impugned judgment was set aside.

2. Basic Information of the Judgment

Case Title: Ram Chandra Choudhary & Ors. vs. Roop Nagar Dugdh Utpadak Sahakari Samiti Limited & Ors.

Civil Appeal No.: 4352 of 2026 (arising out of SLP (C) No. 38579 of 2025)

Bench: Justice B.V. Nagarathna and Justice R. Mahadevan

Date of Decision: April 10, 2026

Citation: 2026 INSC 347

Appeal From: Judgment and order dated 18.05.2022 of the Division Bench of the Rajasthan High Court at Jodhpur in D.B. Special Appeal Writ No. 704 of 2015

3. Legal Framework

This judgment involves the maintainability of writ petitions against co‑operative societies, the scope of bye‑law making power under the Rajasthan Co‑operative Societies Act, 2001, and the distinction between eligibility conditions and disqualifications.

A. Key Provisions of Law:

Rajasthan Co‑operative Societies Act, 2001:

• Section 8: Power to frame bye‑laws for matters enumerated in Schedule B.

• Schedule B, Clause (da): Norms regarding minimum essential utilisation of services or attendance.

• Schedule B, Clause (v): Power to send a representative to another society.

• Section 18: Member’s rights subject to fulfilling obligations including minimum service utilisation.

• Section 28: Disqualifications for being a member of committee.

• Section 32: Elections to be conducted in accordance with Act, Rules, and bye‑laws.

• Section 58: Disputes touching constitution, management, or business (including election disputes) to be referred to Registrar.

• Sections 104-107: Appellate and revisional remedies.

B. Related Precedents (Discussed in the Judgment):

• Federal Bank Ltd. v. Sagar Thomas (2003) 10 SCC 733: Writ against non‑State entity lies only if it performs public duty; mere regulatory control insufficient.

• Thalappalam Service Co‑op. Bank Ltd. v. State of Kerala (2013) 16 SCC 82: Co‑operative societies are not “State” under Article 12; regulatory supervision does not make them instrumentalities.

• Titaghur Paper Mills Co. Ltd. v. State of Orissa (1983) 2 SCC 433: Where statute provides complete machinery, writ petition not maintainable.

• Jyoti Basu v. Debi Ghosal (1982) 1 SCC 691: Right to vote and right to contest are statutory, not fundamental rights.

• K. Krishna Murthy v. Union of India (2010) 7 SCC 202: Political participation rights are subject to statutory control.

• Co‑operative Central Bank v. Additional Industrial Tribunal (1969) 2 SCC 43: Bye‑laws govern internal management and bind members.

• State of T.N. v. P. Krishnamurthy (2006) 4 SCC 517: Subordinate legislation carries presumption of validity; can be struck down only on limited grounds.

4. Relevant Facts of the Case

• Three‑Tier Dairy Co‑operative Structure: Primary Milk Societies (village level) → District Milk Unions (district level) → State Federation.

• Impugned Bye‑laws: Bye‑law Nos. 20.1(2) (audit classification A/B), 20.1(4) (society not closed for >90 days), 20.2(7) (minimum 270 days milk supply), 20.2(9) (minimum quantity of milk supply) – prescribed eligibility for representatives of Primary Societies to contest elections to District Milk Union Boards.

• Writ Petition (2010): Certain Primary Societies challenged the bye‑laws before Rajasthan High Court.

• Single Judge (24.07.2015): Declared bye‑laws ultra vires, but protected elections already held in 2010.

• Division Bench (18.05.2022): Dismissed State’s appeal, affirmed Single Judge.

• Present Appeal: Filed by Chairpersons of District Milk Unions (not parties to writ proceedings) challenging the judgment.

5. Issues Identified by the Supreme Court

• Whether the writ petitions under Article 226 were maintainable against co‑operative societies that are not “State” under Article 12, especially when an alternative statutory remedy exists under the Act, 2001.

• Whether the impugned bye‑laws were within the rule‑making power under Section 8 read with Schedule B of the Act, 2001.

• Whether the bye‑laws prescribed permissible eligibility conditions or amounted to disqualifications beyond Section 28.

• Whether the High Court could strike down bye‑laws of societies that were not impleaded as parties, violating natural justice.

• Whether the High Court erred in conflating the right to vote with the right to contest elections.

6. Ratio Decidendi (The Reasoning and Decision of the Court)

A. Writ Petition Not Maintainable – No “State” Action, Alternative Remedy Exists

The Court held that District Milk Unions are not “State” under Article 12. They are autonomous, member‑driven bodies; regulatory supervision by the Registrar does not amount to deep and pervasive State control. Moreover, the Act provides a complete statutory mechanism for dispute resolution – Sections 58, 60, 104-107 – including election disputes. The writ petitioners bypassed this mechanism without showing inefficacy. Therefore, the writ petitions ought not to have been entertained. (Paras 14-15.12)

B. Bye‑laws Within Statutory Power – Section 8 read with Schedule B

The impugned bye‑laws were traceable to Section 8 read with Schedule B, Clauses (da) (minimum utilisation of services) and (v) (representation to another society). Section 18 also conditions membership rights on fulfilling bye‑law obligations. The bye‑laws supplement the Act, do not supplant it, and further the object of ensuring active participation in co‑operative governance. The delegation is not excessive. (Paras 20-20.15)

C. Eligibility Conditions, Not Disqualifications

The Court drew a clear distinction: disqualifications under Section 28 operate as statutory disabilities upon specified negative circumstances; eligibility conditions are positive, objective thresholds for candidature. The impugned bye‑laws (audit classification, operational continuity, minimum supply) are uniformly applicable, objective, and capable of being satisfied. They do not attach any stigma or permanent exclusion. The High Court erred in treating them as disqualifications. (Paras 18-19.7)

D. Right to Vote vs. Right to Contest – Distinct Rights

The Court reiterated that neither right is fundamental; both are statutory. The right to contest is an additional right subject to stricter regulation. The impugned bye‑laws regulate candidature (eligibility to contest), not the right to vote. The High Court conflated the two, applying an erroneous standard. (Paras 18-18.7)

E. Non‑Joinder of Necessary Parties – Violation of Natural Justice

The High Court struck down bye‑laws of all District Milk Unions in Rajasthan, including those not impleaded. This amounts to an in rem judgment affecting autonomous societies without hearing them, violating audi alteram partem. The judgment is unsustainable on this ground alone. (Paras 21-21.6)

7. New Legal Principles Established / Reiterated

• Co‑operative societies are not amenable to writ jurisdiction under Article 226 for disputes concerning internal governance and elections: An efficacious statutory remedy under the Co‑operative Societies Act must be exhausted. Mere regulatory control does not make a society “State”.

• Bye‑laws prescribing eligibility for contesting elections are valid if traceable to the enabling statute and consistent with its object: They operate in a distinct field from statutory disqualifications.

• Eligibility conditions are not disqualifications: The former are positive, objective, and capable of satisfaction; the latter are negative, disabling, and permanent unless removed.

• The right to contest elections is distinct from the right to vote and may be subjected to additional reasonable eligibility criteria.

• A High Court cannot strike down bye‑laws of societies not impleaded in the writ petition: Such adjudication violates natural justice and amounts to an impermissible in rem exercise of writ jurisdiction.

8. The Court’s Analysis and Examination of Concepts

A. Maintainability – “State” and Public Duty

The Court applied the tests from Ajay Hasia and Federal Bank Ltd., finding no deep and pervasive State control. The Registrar’s powers are regulatory, not managerial. The societies are not financially dependent on the State. The dispute (eligibility for elections) does not involve enforcement of a public duty but concerns internal governance.

B. Eligibility vs. Disqualification – Conceptual Clarity

The Court emphasised that disqualifications under Section 28 (e.g., insolvency, conflict of interest, conviction) are personal disabilities. The impugned bye‑laws prescribe performance‑based thresholds for the primary society as a unit – e.g., supplying milk for 270 days, audit classification. These are not personal disqualifications but functional eligibility criteria. The High Court’s equation of the two was a fundamental error.

C. Delegated Legislation – Presumption of Validity

Applying P. Krishnamurthy and Naresh Chandra Agrawal, the Court held that bye‑laws carry a presumption of validity. The burden was on the writ petitioners to show they were ultra vires. They failed to do so. The bye‑laws were consistent with the object of the Act – to promote active, accountable co‑operative governance.

D. Natural Justice – Non‑joinder of Parties

The Court noted that out of 16 District Milk Unions, only a few were impleaded. Yet the High Court struck down bye‑laws across all Unions. This deprived the non‑impleaded societies of an opportunity to be heard. Such an order cannot stand, especially when it affects their internal governance and electoral processes.

9. Critical Analysis of the Judgment

Strengths

• Correctly restricts writ jurisdiction: Prevents the High Court from bypassing statutory remedies under the Co‑operative Societies Act, which is a self‑contained code.

• Clarifies the distinction between eligibility and disqualification: This will guide co‑operative societies in framing bye‑laws and courts in reviewing them.

• Upholds co‑operative autonomy: Recognises that societies have the right to regulate their own governance through bye‑laws, subject to statutory limits.

• Protects natural justice: The ruling on non‑joinder of necessary parties reinforces that courts cannot pass orders prejudicing absent parties.

Potential Concerns / Critiques

• The judgment does not address whether the bye‑laws were reasonable or arbitrary on merits: Having held the writ petitions not maintainable, the Court could have stopped there. However, it went on to decide the validity of the bye‑laws on merits, which may be seen as obiter. Nevertheless, the discussion provides useful guidance.

• The “alternative remedy” bar is not absolute: The Court did not consider whether the statutory remedy under Section 58 would be efficacious for a challenge to bye‑laws as ultra vires the Act. However, Section 58(2)(c) includes election disputes, and Section 125 empowers the Registrar to rescind resolutions/bye‑laws, so the remedy was likely adequate.

Impact

• Co‑operative election disputes: Litigants must first approach the Registrar under Section 58 of the Act, not directly invoke writ jurisdiction.

• Bye‑law challenges: The validity of bye‑laws will be tested on whether they are traceable to the enabling statute and consistent with its object, not on the High Court’s perception of reasonableness.

• Eligibility conditions in co‑operatives: Societies can prescribe performance‑based eligibility criteria for contesting elections without violating the Act.

10. Final Outcome

The Supreme Court allowed the appeal. The impugned judgment and order of the High Court (Single Judge and Division Bench) were set aside. The bye‑laws were upheld as valid. No order as to costs.

11. Practical Application, Court Lines, and Legal Strategy

Use in Court (Practical Application)

• For a co‑operative society: If a member challenges your bye‑laws governing eligibility for elections, argue that the writ petition is not maintainable. Point to the statutory remedy under Sections 58, 104-107 of the Co‑operative Societies Act. Also argue that the bye‑laws are traceable to Section 8 read with Schedule B and prescribe eligibility conditions, not disqualifications.

• For a member of a co‑operative society: Before filing a writ petition challenging bye‑laws, exhaust the statutory remedies. File a dispute before the Registrar under Section 58. Only if the statutory remedy is inefficacious or the challenge is to the vires of the parent Act should you approach the High Court.

• For the High Court: When a writ petition challenges bye‑laws of co‑operative societies, first examine maintainability. If the society is not “State” and an alternative remedy exists, dismiss the petition unless exceptional circumstances are shown. If you proceed on merits, ensure all affected societies are impleaded.

Court Lines

“The respondent societies neither qualify as ‘State’ within the meaning of Article 12 nor are they shown to be discharging any public duty of a statutory or public character.” (Para 14.8)

“The existence of such a self‑contained, multi‑tiered remedial framework evinces a clear legislative intent that disputes relating to elections and internal governance of co‑operative societies be resolved within the statutory domain.” (Para 15.3)

“A careful reading of the impugned bye‑laws makes it evident that they do not regulate or curtail the right of members to cast their vote. The bye‑laws are directed at the eligibility of the President or representative of a primary co‑operative society to contest elections to, or to continue as a member of, the Board of Directors.” (Para 18.5)

“The High Court, by equating regulation of eligibility to contest elections with a restriction on the right to vote, conflated two distinct statutory rights and consequently applied an erroneous standard of scrutiny.” (Para 18.7)

“By invalidating bye‑laws of societies that were not before the Court, the High Court effectively deprived them of an opportunity of hearing and unsettled their internal governance structures and affected their legal rights without due process.” (Para 21.5)

Legal Strategy Insight

For the Co‑operative Society (Defending Bye‑laws):

• Step 1 – Raise maintainability as a preliminary objection: File an application arguing that the writ petition is not maintainable because (i) the society is not “State”; (ii) the dispute falls under Section 58 of the Act; (iii) the petitioner has not exhausted statutory remedies. Cite Federal Bank Ltd. and Thalappalam.

• Step 2 – On merits, distinguish between eligibility and disqualification: Show that the bye‑laws prescribe positive, objective conditions (e.g., minimum supply, operational continuity) that are traceable to Schedule B Clauses (da) and (v). Argue that they do not add to Section 28 disqualifications.

• Step 3 – If the writ petition is entertained despite objections, move for impleadment of all affected societies. If impleadment is denied, argue that any order passed will be void for violation of natural justice.

For the Member (Challenging Bye‑laws):

• Step 1 – File a dispute before the Registrar under Section 58(2)(c) (election dispute) or Section 58(1) (dispute touching constitution/management). Alternatively, approach the Registrar under Section 125 to rescind the bye‑law.

• Step 2 – If the Registrar’s order is adverse, appeal under Sections 104-107. Only after exhausting these remedies, if a question of constitutional validity arises, consider filing a writ petition.

• Step 3 – If you file a writ petition, implead all societies whose bye‑laws are challenged. Otherwise, the court may dismiss the petition for non‑joinder of necessary parties.