Power of control under co-operative societies law cannot be used to de facto supersede elected management.

Section 54 of the Mysore Co-operative Societies Act, 1959 conferred only a limited power of control over the conduct of a society's business, not a power of supersession. Notifications that displaced the entire committee of management, removed the President and Vice-President, and replaced them with a new body exceeded that power and were ultra vires, especially because the Act provided a separate supersession mechanism under section 30. The action also bypassed the notice and opportunity contemplated by that scheme, rendering it arbitrary and contrary to natural justice. The result was that the notifications were unsustainable in law.

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Issues: (i) Whether the impugned notifications issued under the Mysore Co-operative Societies Act, 1959 were within the scope of the power conferred by section 54. (ii) Whether the notifications were invalid for violation of natural justice.

Issue (i): Whether the impugned notifications issued under the Mysore Co-operative Societies Act, 1959 were within the scope of the power conferred by section 54.

Analysis: Section 54 authorised the State Government, where sufficient State aid had been given and public interest so required, to exercise such control over the conduct of business of the society as would safeguard the interests of the State. The power was one of control, not of supersession. The notifications, however, displaced the entire committee of management, removed the President and Vice-President, and substituted a new body with enlarged nomination powers. That course amounted to doing indirectly what the statute did not permit directly, especially when section 30 separately provided the machinery for supersession of a committee.

Conclusion: The notifications were ultra vires section 54 and invalid.

Issue (ii): Whether the notifications were invalid for violation of natural justice.

Analysis: The statutory scheme contemplated notice and opportunity before supersession of management under section 30. The impugned action deprived the existing committee of its management rights without following that safeguard. The exercise of power was therefore arbitrary and contrary to the principles of natural justice.

Conclusion: The notifications were vitiated for breach of natural justice.

Final Conclusion: The State Government could not use the power of control to effect a de facto supersession of the committee, and the impugned notifications were unsustainable in law.

Ratio Decidendi: A statutory power to exercise control over the conduct of a co-operative society's business does not authorise the State to supersede the elected management or to achieve indirectly what the Act permits only through a separate supersession procedure, especially where notice and opportunity are required.

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