Part IXB under the chapter heading ‘The Co-operative Societies’. The Constitution 97th Amendment Act was passed by the requisite majority of the Lok Sabha on 27.12.2011 and the Rajya Sabha on 28th December,2011. The Presidential assent to the aforesaid Amendment followed on 12th January, 2012 and the said Amendment was published in the Official Gazette of India on 13th January,2012, coming into force with effect from 15th February,2012.

The 97th Constitutional Amendment was challenged in the matter of Rajendra N Shah v. Union of India 2013 (2) G.L.R.  1698    and the Gujarat High Court allowed the said Public Interest Litigation by declaring that the Constitution 97th Amendment Act, 2011 inserting part IXB containing Articles 243ZH to 243ZT is   ultra vires the Constitution of India for not taking recourse to Article 368(2).

The important question raised in these petitions and decided by a division bench of the Gujarat High Court by its judgment dated 22nd April,2013 is whether Part IXB is non est for want of ratification by half of the States under the proviso to Article 368(2). The  judgment of the High Court has declared that the said constitutional amendment inserting Part IXB is ultra vires the Constitution of India for want of the requisite ratification under Article 368(2) proviso, which however will not impact amendments that have been made in Article 19(1)(c) and in inserting Article 43B in the Constitution of India. That is formation of Associations and States endeavor to promote voluntary associations under Directive Principles.

The amendment was carried out in The Maharashtra Co-operative Societies Act, 1961 in consonance with the provisions of 97th Constitutional Amendment which came into effect from 12th January, 2012. The Maharashtra Co-operative Societies Amendment Act came into effect from 13th August, 2013.

New Model bye-laws came into force from September 2014, duly approved by the Commissioner for Co-operation and Registrar, C.S., Maharashtra State, Pune. The overall enforcement and application of the old Bye-Laws are the same with certain modifications to be in consonance and in agreement of the 97th amendment to the Constitution of India.

NOW LET US SEE GIST OF THE AMENDMENTS UNDER 97th CONSTITUTIONAL AMENDMENTS :

The Constitution of India is amended by 97th Constitution of Amendment and inserted Part IXB to the Constitution of India, a Chapter relating to the Co-operative Societies. Article 243ZH to 243ZT is inserted by this Amendment Act of 2011 with effect from 15th February 2012. A Chapter defines various terms.

Authorized person in Article 243ZH(a).

Article 243ZH(b) defined the terms Board and it means the Board of Directors or the Governing body of the Society by whatever name called to whom the control of management of the affairs of the Society is entrusted.

Article 243ZH(c) defined the terms Co-operative Society and it means a Society registered or deemed to be registered under any law relating to the Co-operative Societies for the time being in force.

Article 243ZH(d) defined the terms Multi-state Co-operative Society and it means whose object is not confined to one State and is registered or deemed to be registered under the law for the time being in force relating to such Co-operative Society.

Article 243ZH(e) defined the term office bearer and it means President, Vice President, Chairperson, Vice Chairperson, Secretary or Treasurer and includes any other person to be elected by the Board of any Co-operative Society.

Article 243ZH(f) defined the terms ‘registrar’ and it means the Central Registrar appointed by the Central Government in relation to the Multi-State Co-operative Societies and the Registrar for the Co-operative Societies appointed by the State Government under the Law made by the Legislature of a State in relation to the Co-operative Societies.

Article 243ZH(g) defined the term State Act and it means that any law made by the State Legislature,

Article 243ZH(h) defined the term State Level Co-operative Society to mean a Society having its area of operation extending to the whole of the State and define as such in any law made by the State Legislature.

Article 243ZI dealt with incorporation of the Co-operative Societies and it says that subject to provisions of Part IXB, the State Legislature may make provisions with respect to the incorporation regulation and winding up of a society based on the principle of voluntary formation, democratic member control, member economic participation and autonomous functioning.

Article 243ZJ laid down number and term of members of the Board and its office bearers.

Article 243ZK provided for election of members of Board.

Article 243ZM provided for audit of the Accounts of the Co-operative Society.

Article 243ZN provided that General Body Meeting of the Society shall be convened within a period of 6 months of close of financial year to transact the business as may be provided in such law.

Article 243ZO gave right to member of a society to get information regarding the books, information and accounts of the Co-operative Society kept in regular transaction of its business with such member and it says that the State Legislature may make law in this regard to ensure that the participation of the members in management of the Society providing minimum requirement of attending the meetings by the member and utilizing minimum level of services as may be provided in such law. Sub-Clause 3 to this Article says that the State Government may by law provide for Co-operative Education and training for its members.

Article 243ZP dealt with returns which shall be filed by the Society within 6 months of close of every financial year to the authority designated by the State Government including annual reports of its activity, audited statement of accounts plan for surplus disposal as approved by the General Body, list of amendments to the Bye-Laws of the Co-operative Societies, if any, demarcation regarding the date of holding is General Body Meeting and conduct of elections when due and any other information required by the Registrar in pursuance of any of the provisions of the State Act.

Article 243ZQ provided for offences and penalties and lays down who shall be accountable for it.

Article 243ZR provisions to apply to Multi-state Co-operative Societies with a change that State Government, State Act, Legislature of the State shall be construed as Parliament, Central Government or State Act, respectively as the case may be.

Article 243ZS provided for Application of this Article even to Union territories. Article 243ZT provides for continuance of the existing laws.

Judgement of Supreme Court:

Now Supreme Court in its three judges Bench by majority Judgment dated 20th July,2021 Union of India vs Rajendra Shah held that, The judgment of the High Court is upheld except to the extent that it strikes down the entirety of Part IXB of the Constitution of India. As held by us above, it is declared that Part IXB of the Constitution of India is operative only insofar as it concerns Multi-State Cooperative Societies both within the various States and in the Union territories of India.

CONCLUSION:

Following the 97th Amendment of Constitution of India, the states were required to amend their respective co-operative laws on or before end of one year of the amendment of constitution. The Government of Maharashtra issued an Ordinance on 13th  of February 2013 to amend the Maharashtra Co-operative Societies Act, 1960. The amendments were effective from 14th  February,2013. Later the amendment act to amend the Maharashtra Co-operative Societies Act, 1960 was introduced and the same was passed in the Maharashtra legislature.

It also amended Model Byelaws.

Similarly, Gujarat also passed Act No.17 of 2013.

However Supreme Court has restored the Federal Structure and freedom of States to enact laws under Constitution of India.

Amendments shall continue to be applicable to Multi State Cooperative Societies like Banks and Sugar Cooperative Societies.

As far as housing societies are concerned its struck down for want of ratification by the Legislatures of not less than one-half of the States by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent.

Shruti Desai

9th August,2021