CONSTITUTIONAL PROVISIONS RELATING CONSTITUTIONAL PROVISIONS RELATING TO CO-OPERATIVE SOCIETIESTO CO-OPERATIVE SOCIETIES

INTERNATIONAL CO-OPERATIVE YEAR - 2012

CONSTITUTIONAL PROVISIONS RELATING TO CO-OPERATIVE SOCIETIES

PRESENTED BY:

Advocate B. R. BORNAK

M. Com., M. A., LL. B., G.D.C.& A., D.L.L., D.J.M.C., D.C.A.

ADVOCATE – HIGH COURT - MUMBAI

THE 97TH CONSTITUTIONAL AMENDMENT ACT, 2011

THE FIRST AND VERY MUCH HONEST EFFORT BY THE

PARLIAMENT OF INDIA TO TAKE COGNIZANCE OF

CO-OPERATIVE SECTOR IN THE CONSTITUTION OF

INDIA BY GIVING SEPARATE AND IMPORTANT PLACE

TO CO-OPERATIVE SECTOR IN THE CONSTITUTION.

THE CONSTITUTIONAL 97TH AMENDMENT ACT – 2011

Passed In 2011 By The Parliament Of India.

Received Presidential Assent On 12th January 2012.

Amendment with The Objective To Enhance Public Faith In Cooperatives And Insulate From Avoidable Political And Bureaucratic Interference.

The Centre Government Has Asked State Governments To Amend Their Respective State Coop Society Acts In Tune With The Constitutional 97th Amendment Act, 2011 On or Before February 14, 2013.

PLACE OF CO-OPERATIVE ORGANISATIONS IN THE CONSTITUTIONPLACE OF CO-OPERATIVE ORGANISATIONS IN THE CONSTITUTION RIGHT TO FORM CO-OPERATIVE SOCIETIES IS NOW A FUNDAMENTAL RIGHT: RIGHT TO FORM CO-OPERATIVE SOCIETIES IS NOW A FUNDAMENTAL RIGHT:

Part III – Fundamental Rights:Part III – Fundamental Rights: Under Article 19 – Right to Freedom:Under Article 19 – Right to Freedom: In Clause (1)(c) addition of wordings:In Clause (1)(c) addition of wordings: Right to Form co-operative Societies. Right to Form co-operative Societies.

Part IV – Directive Principles of State Policy:Part IV – Directive Principles of State Policy: New Article 43B has been added: New Article 43B has been added: State Responsibility to Promote:State Responsibility to Promote:• Voluntary Formation,Voluntary Formation,• Autonomous Functioning,Autonomous Functioning,• Democratic Control andDemocratic Control and• Professional Management Professional Management Of co-operative societies.Of co-operative societies.

To give separate place and identity to Co-operative Sector : To give separate place and identity to Co-operative Sector :

New Part IXB has been Added: New Part IXB has been Added:

HEADING: HEADING: THE CO-OPERATIVE SOCIETIES:THE CO-OPERATIVE SOCIETIES: Articles under Part IXB:Articles under Part IXB:

Article 243 ZH: Article 243 ZH: • Definitions:Definitions:

(a)(a) Authorised person.Authorised person.

(b)(b) Board.Board.

(c)(c) Co-operative Society.Co-operative Society.

(d)(d) Multi-State Co-operative Society.Multi-State Co-operative Society.

(e)(e) Office Bearer.Office Bearer.

(f)(f) Registrar.Registrar.

(g)(g) State Act.State Act.

(h)(h) State Level Co-operative Society.State Level Co-operative Society.

Article 243 ZI:Article 243 ZI: Incorporation, Regulation and Winding up of co-op. societies Incorporation, Regulation and Winding up of co-op. societies • State Legislature to make provisions as to:State Legislature to make provisions as to:• Incorporation, Regulation and Winding up of co-op. societies -Incorporation, Regulation and Winding up of co-op. societies -• Based on the principles of:Based on the principles of:• voluntary formation, voluntary formation, • democratic member-control, democratic member-control, • member-economic participation member-economic participation

and and • autonomous functioning. autonomous functioning.

Article 243 ZJ: Number and Term of Members of Board and its Office Bearers: Article 243 ZJ: Number and Term of Members of Board and its Office Bearers: • maximum 21 members in Board/Managing Committee.maximum 21 members in Board/Managing Committee.• reservations – Women-2, SC/ST-1, OBC-1, VJ/NT/SBC-1.reservations – Women-2, SC/ST-1, OBC-1, VJ/NT/SBC-1.• Term of Board 5 years.Term of Board 5 years.

Co-option Of Members As Expert Directors:Co-option Of Members As Expert Directors: A) Co-option Of Maximum Two Persons As Members Of The Board In Addition To A) Co-option Of Maximum Two Persons As Members Of The Board In Addition To

Twenty One Directors Specified In The Act.Twenty One Directors Specified In The Act.

B)the Co-opted Members Should Have Experience In The Field Of Banking, B)the Co-opted Members Should Have Experience In The Field Of Banking, Management, Finance Or Specialization In Any Other Field Relating To The Management, Finance Or Specialization In Any Other Field Relating To The Objects And Activities Of The Co-operative Societies.Objects And Activities Of The Co-operative Societies.

C)they Shall Have No Right To Vote In Any Elections Of The Co-operative society C)they Shall Have No Right To Vote In Any Elections Of The Co-operative society In Their Capacity.In Their Capacity.

D)they Are Not Eligible To Be Elected As Office Bearers Of The Board.D)they Are Not Eligible To Be Elected As Office Bearers Of The Board.

Article 243 ZK: Article 243 ZK: • Election of Member of Board.Election of Member of Board.• before expiry of term.before expiry of term.• By State co-operative election authority.By State co-operative election authority.

Article 243 ZL: Article 243 ZL: • Supersession and Suspension of Board and Interim Management: Supersession and Suspension of Board and Interim Management: • for maximum 6 months for co-operative societies except banking.for maximum 6 months for co-operative societies except banking.• for banking 1 year. for banking 1 year. • No Supersession and Suspension of Board if no Govt. financial assistance.No Supersession and Suspension of Board if no Govt. financial assistance.

Article 243 ZM: Article 243 ZM: • PROVISIONS AS TO ACCOUNTS & AUDIT:PROVISIONS AS TO ACCOUNTS & AUDIT: By making Law, the State Legislature to make provisions of Accounts and Audit of By making Law, the State Legislature to make provisions of Accounts and Audit of

Co-operative Societies in the state.Co-operative Societies in the state.

AUDIT OF ACCOUNTS OF CO-OPERATIVE SOCIETIES: AUDIT OF ACCOUNTS OF CO-OPERATIVE SOCIETIES: • Once In Each Financial Year.Once In Each Financial Year.

• Within Six Months Of The Close Of The Financial Year To Which Such Accounts Within Six Months Of The Close Of The Financial Year To Which Such Accounts Relate.Relate.

• The State Legislature to lay Down The Minimum Qualification And Experience Of The State Legislature to lay Down The Minimum Qualification And Experience Of Auditors and Auditing Firms that Shall Be Eligible For Auditing Accounts of co-Auditors and Auditing Firms that Shall Be Eligible For Auditing Accounts of co-operative societies.operative societies.

• Auditor Shall Be Appointed By The General Body Of The Cooperative Society Auditor Shall Be Appointed By The General Body Of The Cooperative Society From A Panel Approved By The State Government Or An Authority Authorized By From A Panel Approved By The State Government Or An Authority Authorized By the State Government. the State Government.

• The Audit Report Of An Apex Co-operative Society Shall Be Laid Before The State The Audit Report Of An Apex Co-operative Society Shall Be Laid Before The State Legislature In The Prescribed Manner.Legislature In The Prescribed Manner.

Article 243 ZN: Article 243 ZN: • Annual General Body Meetings within 6 months from close of Accounting year.Annual General Body Meetings within 6 months from close of Accounting year.

Article 243 ZO: Article 243 ZO: • Right of the Member to get Information: Right of the Member to get Information: • State Legislature to make provisions.State Legislature to make provisions.

Article 243 ZP: Article 243 ZP: Filing Of Return:Filing Of Return: A)every Co-operative Society Shall Have To File Return Within Six Months Of Close Of A)every Co-operative Society Shall Have To File Return Within Six Months Of Close Of

Financial Year To The Designated Authority.Financial Year To The Designated Authority. B)the Return Should Include The Following Matters:B)the Return Should Include The Following Matters: I. Annual Report Of Its Activities.I. Annual Report Of Its Activities. Ii. Audited Statement Of Accounts.Ii. Audited Statement Of Accounts. Iii. Plan for Surplus disposal as Approved by the General Body of the Cooperative Society.Iii. Plan for Surplus disposal as Approved by the General Body of the Cooperative Society. Iv. List Of Amendments To The Bye Laws Of The Co-operative Society.Iv. List Of Amendments To The Bye Laws Of The Co-operative Society. V. Declaration Regarding Holding Of General Body Meeting And Conduct Of Elections V. Declaration Regarding Holding Of General Body Meeting And Conduct Of Elections

When Due.When Due. Vi. Any Other Information Required By The Registrar In Pursuance Of Any Of The Vi. Any Other Information Required By The Registrar In Pursuance Of Any Of The

Provisions Of The State Act.Provisions Of The State Act.

Article 243 ZQ: Article 243 ZQ: • Offences and Penalties: Offences and Penalties: • State Legislature to make provisions.State Legislature to make provisions.

Article 243 ZR: Article 243 ZR: • Applicable to Multi State Co-op. societies.Applicable to Multi State Co-op. societies.

Article 243 ZS: Article 243 ZS: • Applicable to Union Territories.Applicable to Union Territories.

Article 243 ZT: Article 243 ZT: • Continuance of exiting Laws till amendment.Continuance of exiting Laws till amendment.

CONTACT:ADVOCATE B. R. BORNAK

M. Com., M. A., LL. B., G.D.C.&A., D.L.L., D.J.M.C., D.C.A. ADVOCATE-HIGH COURTMOBILE NO.: 9869450525 Mail ID: advbrbornak@gmail.com

FOR ANY FURTHER CLARIFICATION….